California Senate unanimously passes sweepstakes casino ban

• The California State Senate unanimously approved Assembly Bill 831 on Monday, 9 September 2025, targeting sweepstakes casinos and sportsbooks operating in the state
• The legislation prohibits any individual or entity from supporting online sweepstakes gambling, with penalties including fines and jail time
• Backed by Native American tribes and gaming associations, the bill returns to the Assembly before potentially reaching Governor Newsom’s desk

California has moved closer to banning sweepstakes casinos and sportsbooks after the state Senate unanimously passed Assembly Bill 831 on Monday, 9 September 2025.

The legislation, authored by Assembly member Avelino Valencia, aims to eliminate unregulated online gambling operations that compete with licensed gaming establishments.

The bill makes it illegal for any person, entity, financial institution, payment processor, or media affiliate to knowingly support the operation or promotion of online sweepstakes games within California. Violators could face significant penalties including fines up to $25,000 and up to one year in jail under the proposed legislation.

“Many of these ‘sweepstakes’ operators are based offshore and function without proper oversight, avoiding requirements like consumer protections, responsible gaming safeguards, background checks, and tax compliance,” Valencia said in a statement regarding the bill.

The Senate amended AB 831 before passing it on Monday, requiring the legislation to return to the California State Assembly for approval of the changes. If the Assembly accepts the amendments, the bill will proceed to Governor Gavin Newsom for his signature.

The legislation received substantial backing from California’s Native American gaming tribes, who view sweepstakes casinos as unfair competition to their regulated operations. The Yuhaaviatam of San Manuel Nation and the California Nations Indian Gaming Association both co-sponsor and support the bill.

“The state’s voters have consistently shown their trust in Native American tribes to operate gaming facilities responsibly and ethically,” the Yuhaaviatam of San Manuel Nation stated in written arguments supporting the legislation.

“Allowing unregulated and predatory sweepstakes operators to bypass these regulations undermines that trust and integrity of California’s gaming policies.”

Recent amendments to AB 831 clarified that the legislation does not target licensed cardrooms, the state lottery, or legitimate promotional contests run by businesses. The bill specifically excludes game promotions conducted by commercial entities on a limited basis as marketing tools that are incidental to actual product or service sales.

According to Senate floor analysis, sweepstakes casino revenue has experienced dramatic growth, reaching $3.1 billion in 2022 and projected to exceed $8 billion by the end of 2024. This surge in popularity has coincided with increasing regulatory scrutiny across multiple states.

The analysis noted that several jurisdictions have already taken action against sweepstakes operations, including Connecticut’s outright ban and cease-and-desist orders in Louisiana. California joins a growing number of states explicitly prohibiting online sweepstakes casinos, particularly those utilising dual-currency systems.

The bill targets online games using a “dual currency” model that allows players to purchase coins that can be wagered and exchanged for prizes or cash. The legislation specifically aims to close loopholes that permit companies to offer online games that closely mimic casino-style slots and sports betting while claiming to operate legally.

The legislative push against sweepstakes casinos forms part of a broader effort by California regulators and Native American tribes to maintain control over the state’s gambling landscape. Earlier this year, the state’s attorney general declared daily fantasy sports contests illegal, whilst tribes have opposed federally regulated prediction markets.

“These operations undermine the voter-approved framework that affirms Tribal governments’ sovereign right to conduct gaming in California,” Valencia stated. “AB 831 strengthens that framework and ensures gaming in California remains fair and accountable.”

Despite industry opposition from groups including the Social Gaming Leadership Alliance and the Social and Promotional Games Association, who warned the bill could criminalise legitimate promotional games, Monday’s unanimous Senate passage demonstrates strong legislative support.

If signed into law, AB 831 would represent a significant victory for California’s gaming tribes, who have long argued that sweepstakes casinos undermine the state’s carefully regulated gambling framework. The legislation reflects ongoing tensions between traditional gaming operators and emerging online platforms operating in regulatory grey areas.