California BANS Sweepstakes Casinos With AB 831

Observers of the sweepstakes gaming industry have been hanging in suspense since an anti-sweepstakes gaming bill was presented to California Governor Gavin Newsom (D) on Sept. 24, 2025. There was some doubt as to whether he would sign or veto the bill, but on Oct. 11, the governor's office released a statement confirming that he has signed it into law. California Assembly Bill 831 is set to take effect Jan. 1, 2026.

What Does AB 831 Do?

The text of AB 831 is rather lengthy, so we have taken the liberty of reproducing the most relevant parts below:

(a) It is unlawful for any person or entity to operate, conduct, or offer an online sweepstakes game in this state.
…
(3) “Online sweepstakes game” means a game, contest, or promotion that meets all of the following conditions:

(A) Available on the internet or accessible on a mobile phone, computer terminal, or similar device.

(B) Utilizes a dual-currency system of payment that allows a person to play or participate with direct consideration or indirect consideration, and for which the person playing or participating may become eligible for a prize, award, cash, or cash equivalents or a chance to win a prize, award, cash, or cash equivalents.

(C) Simulates gambling, which, for purposes of this section, includes, but is not limited to, any of the following:

(i) Slot machines.

(ii) Video poker.

(iii) Table games, including, but not limited to, blackjack, roulette, craps, and poker.

(iv) Lotteries, as defined in Section 319.

(v) Bingo.

(vi) Sports wagering.

(D) Awards cash or cash equivalents.

This basically describes in detail the sweepstakes model of gaming that was pioneered by Chumba Casino more than a decade ago. It has since gone on to be copied extensively not just by Chumba's partner sites Global Poker and Luckyland Slots but also by many competitors, like Stake.us and McLuck Casino.

Importantly, this wording of this legislation refers to “dual-currency” payment systems. This refers to the widespread use in sweeps casinos of two separate currencies. Generally, there's a play money currency that can never be cashed out and has no real-world value. When users purchase play money chips, they also get for free a certain number of a second currency, which can be used to enter games and win real prizes. Because this second currency isn't purchased directly but is given away with the purchase of the paly money, the operators contend that nobody is paying to play in real money games.

Thos who break the law could be subject to penalties of up to $25,000 and a year in jail.

Sweeps Model Increasingly Targeted

The online sweepstakes model of gaming was designed to get around anti-gambling laws in various states. For a while, it appeared to fulfill this function admirably, allowing consumers to access what were effectively real money casino and poker games over the internet.

However, a growing number of states have become wise to this circumvention of the rules and have passed legislation explicitly banning these types of online sweepstakes casinos. For example, New Jersey passed an anti-sweeps bill, which was signed into law on Aug. 15, 2025. Meanwhile in New York, a similar bill passed both houses of the legislature and merely awaits the governor's signature before becoming law.

Even states that have not bothered to move forward with new bills to ban sweepstakes casinos often contend that existing state laws prohibit this kind of activity. VGW, the company behind sweepstakes gaming sites Global Poker and Chumba Casino, abandoned Michigan after receiving threatening letters from the Michigan Gaming Control Board, and similar instances have occurred in other states involving both VGW and other leading sweepstakes gaming firms.

California's Impact Could Be Huge

As we've just discussed, there are a number of states that have opted to make life difficult for internet sweepstakes gaming companies. California may be the most important one yet or ever.

Besides having the largest population in the United States with 39.4 million residents, California also ranks fifth in household income. Its residents are already comfortable gambling in live settings with tribal casinos, commercial cardrooms, a state lottery, racetrack wagering, and charitable gaming common.

Thus, the loss of California as a market is a big blow indeed to sweepstakes operators. According to consulting and market research firm Eilers & Krejcik Gaming, California generates revenue of $2.4 billion per year for sweepstakes casinos.

Legislative History

AB 831 was introduced to the California Assembly on Feb. 19, 2025 by State Assemblyman Avelino Valencia (D). Over the next few months, it progressed through various committees and was ready for a vote on May 5, which it passed unanimously 77 – 0. In the Senate, it was a similar story with various committee hearings followed by a successful vote of 36 – 0 on Sept. 8.

The California Senate amended the legislation before passing it, so AB 831 had to proceed back to the Assembly for concurrence. On Sept.12, the Assembly concurred in the amendments proposed by the Senate with a vote of 79 – 0. This happened on the last day in the legislative session.

Normally, the governor has 12 days to sign legislation, veto it, or allow it to pass into law without his signature. However, because the legislature had adjourned for the year, this deadline was extended to 30 days.

California Governor Gavin Newsom Signed AB 831 Into Law

Governor Newsome took almost the entire allotted time before finally signing AB 831 into law on Oct. 11, 2025.

New Restrictions Backed by California Tribes

It's almost impossible to do anything gaming-wise in California without the support of the politically powerful tribes, which have essentially a legalized monopoly on casino gaming. This is one of the reasons why, despite many attempts over the years, online poker regulatory legislation never got anywhere in the Golden State.

Groups of Indian gaming tribes, like the California Nations Indian Gaming Association, were huge supporters of AB 831. They view online gambling of any form as a type of unwanted competition with their brick-and-mortar casino facilities.

However, they highlighted the importance of consumer protection as to why sweepstakes casinos should be banned. Isiah Vivanco, chairman of the Soboba Band of Luiseno Indians, argued:

Unregulated online sweepstakes threaten this voter-approved system by imitating casino gaming without oversight, accountability or community investment…These illegal platforms erase all benefits of regulated gaming while exposing consumers to serious risk.

Another group in favor of banning sweeps casinos was the Sports Betting Alliance, which is made up of regulated gambling operators, like FanDuel and BetMGM. They view sweepstakes gambling as an unwanted complication in the possible development of licensed online California gaming.

Opposition

Though the voting record may not indicate it, there was actually significant opposition to AB 831. Perhaps the unanimity of the voting in favor of the bill was a consequence of the big lobbying money being spent by preexisting gambling interests in the state.

Chief among the detractors of AB 831 were, as is only to be expected, the sweepstakes companies themselves and their industry organizations, like the Social Gaming Leadership Alliance and the Social and Promotional Games Association. A letter signed by the CEO of VGW, the Executive Director of the Social Gaming Leadership Alliance, and several other industry leaders urged Governor Newsom to veto the bill, saying:

This misguided, rushed prohibition would destroy a thriving $1 billion California industry while eliminating our companies’ willingness to pay hundreds of millions in new state taxes. It would also send a chilling message about California as an investment destination and leader in innovation.

Other detractors came from smaller California tribes that lack gaming casinos. Many of them view partnerships with online operators as the only way to get their fair slice of the pie. Tribes in out-of-the-way locations or with smaller populations simply can't compete effectively with their larger brethren in the terrestrial gambling space, and they view internet gaming as a way of evening the field.

Weirdly, the American Civil Liberties Union at one point came out against AB831. It objected to the increased punishments meted out for violators of gambling law as well as overly broad language.

Offshore Sites Unaffected

It's almost inevitable that come Jan. 1, almost all reputable sweepstakes gaming operators will exit California. However, you'll still have access to offshore gaming providers, which have already been serving Californians for decades and are not impacted by the recent alterations to state law.

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Oct. 18, 2025 – by Max Golden, Editor-in-Chief