California’s Governor signs anti-sweepstakes bill into law

• California Governor Gavin Newsom signs Assembly Bill 831, banning online sweepstakes gambling from January 2026
• The law targets operators using dual-currency models to mimic casino-style gaming
• Violators face fines up to $25,000 or one year in jail

California’s Governor Gavin Newsom has signed Assembly Bill 831 (AB 831) into law, marking the end of sweepstakes-style gambling in California starting from 1 January 2026. The measure will close legal loopholes used by online platforms emulating casino gaming under the guise of promotional contests.

Dual-currency model targeted

Under the new legislation, operating or promoting sweepstakes-style contests that use dual-currency systems will be considered a criminal offence. These models typically allow users to buy virtual coins for gameplay while offering real cash payouts.

Violators, excluding ordinary players, could face fines ranging from $1,000 to $25,000 or up to one year in county jail.

Valencia explained the motivation behind the bill, stating:

“Online sweepstakes casinos have increased in popularity by exploiting no purchase necessary models and using dual currencies to take advantage of a grey area in the law,” said Avelino Valencia, California Assemblymember. He added that these operators have been “circumventing the will of the voters and sidestepping the state’s gaming framework.”

Tribal support drives momentum

The California Nations Indian Gaming Association (CNIGA) and the San Manuel Band of Mission Indians strongly backed the bill, citing threats to tribal gaming exclusivity. In their joint statement, the Yuhaaviatam of San Manuel Nation noted:

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

Despite broad tribal support, opposition emerged from some Native groups and industry organisations. The Sherwood Valley Band of Pomo Indians argued the bill could restrict tribal economic development opportunities. In a letter submitted to the legislature, Buffey Bourassa said:

“Eliminating legitimate, regulated digital enterprise will only deepen the disparities our people face and erode our tribal self-sufficiency.”

Industry pushback and legal implications

The Social and Promotional Games Association (SPGA) and the Association of National Advertisers warned that the law might affect legitimate promotional campaigns run by retail and media brands. They contend the language remains overly broad despite amendments protecting individual players.

California Attorney General Rob Bonta previously clarified that the state views fantasy contests and sweepstakes-style operations as forms of gambling under existing law.

AB 831’s passage follows similar legislative actions in states like New Jersey and North Carolina, where regulators have enacted restrictions against sweepstakes casinos.

The new law will require California-based operators and affiliates to cease sweepstakes-related activities by the start of next year or risk criminal prosecution. Regulators are expected to issue enforcement guidelines in the coming months as part of the transition process.