California Governor Gavin Newsom has signed legislation into law to prohibit online sweepstakes casinos from operating in the state.
Introduced by Assemblymember Avelino Valencia (D-Anaheim) earlier this year, Assembly Bill 831 was unanimously approved by the Senate and Assembly last month, with the Governor signing the bill into law on Saturday (11 October).
The bill becomes effective on 1 January 2026 and was co-sponsored by the Yuhaaviatam of San Manuel Nation, the California Nations Indian Gaming Association (CNIGA), and the Tribal Alliance of Sovereign Indian Nations (TASIN).
The legislation will prohibit online sweepstakes games that use a “dual currency” model to mimic casino-style wagering. It would also make it unlawful for any entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to “knowingly and willfully support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game.”
The bill would make a person who violates these provisions guilty of a misdemeanor punishable by a fine of between $1,000 and $25,000, or imprisonment in the county jail for up to one year, or both.
According to research from the Social Gaming Leadership Alliance (SGLA), whose members include VGW and PlayStudios, AB 831 would eliminate $1 billion in direct and indirect benefits to California, with the state also missing out on between $200 million to $300 million annually in new tax revenue through regulation and licensing.
California is the latest US state to crack down on sweepstakes casinos this year, alongside the likes of New Jersey, Montana, Connecticut and Nevada, with legislation still pending in New York and Ohio.
A number of states have also been issuing cease-and-desist letters to online sweepstakes casino operators for violating gambling laws, including New York, Arizona, Louisiana, Maryland, Mississippi and West Virginia.