California Bans Sweepstakes Gambling as Governor Newsom Signs Into Law

Key Highlights of A.B. 831: California’s New Anti-Sweepstakes Law

A.B. 831 passed unanimously in both chambers: 36-0 in the State Senate on September 8 and 63-0 in the State Assembly on September 12.

The law takes effect January 1, 2026, making sweepstakes (including dual currency models) illegal in California.

The ban applies to operators, payment processors, media affiliates, and other entities involved in facilitating sweepstakes gambling.

Violations will be classified as misdemeanors, punishable by fines up to $25,000, up to one year in county jail, or both.

Industry Backlash from SGLA

While the bill received strong support from California’s tribal gaming entities, it faced significant opposition from the Social Gaming Leadership Alliance (SGLA) — an industry group representing sweepstakes operators.

The SGLA argued that the passage of A.B. 831 could lead to:

Over $1 billion in lost economic activity annually

A significant reduction in tax revenue for the state

The elimination of a legal entertainment format used by millions of consumers

Despite this pushback, the California Legislature stood firm. The bill was amended by the State Senate in June 2025 to directly target sweepstakes gambling and was reintroduced as a focused anti-sweeps measure.

What the Law Covers

Under A.B. 831, the following entities will be prohibited from participating in or facilitating sweepstakes gambling in California:

Sweepstakes operators

Financial institutions and payment processors

Geolocation and platform providers

Gaming content suppliers

Media and marketing affiliates

This sweeping measure is intended to close loopholes exploited by operators offering online sweepstakes casinos under dual-currency systems — often seen as operating in a legal gray area.

What’s Next for Operators in California?

With the January 1, 2026 deadline approaching, businesses involved in sweepstakes casinos, social gaming, or gamified promotions must begin compliance reviews and operational shifts immediately to avoid potential criminal penalties.