With a stroke of his pen, California Governor Gavin Newsom put an end to sweepstakes casinos in the state.
Newsom signed California bill AB 831 into law. It was among 56 bills he signed into law on October 11. He had until October 12 to either sign, not sign, or veto the bill.
Bill AB 831 effectively makes illegal any online sweepstakes games that “utilize a dual-currency system.” That would include online sweepstakes casino games.
Standard social casino games operate on a tiered format. Social casino games are free to play. You use virtual coins and win virtual coins that hold no monetary value.
Sweepstakes casino games are also free to play. However, the sweepstakes coins used to play these games can be redeemed for prizes at a later date, including sums of cash.
California lawmakers successfully argued that this constituted an illegal form of gambling, since sweepstakes casino sites are not licensed or regulated in the state. All forms of online gambling are illegal in California.
Currently, real-money online casino gambling is only legal in seven U.S. states. That list includes Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia.
State assemblymember Avelino Valencia originally introduced California bill AB 831 in January 2025. It was receiving unanimous passage through the State Assembly via a series of votes that ultimately led it to Gov. Newsom's desk.
Beyond the sweepstakes casino operators, the new law makes it possible for any financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate found to be working with a sweepstakes casino operator to also be held legally accountable. Violators would be guilty of a misdemeanor. If convicted, the crime would be punishable by a fine of up to $25,000 or up to a year in county jail, or both.
The bill had the backing of a powerful lobby group. The state's tribes, which control all land-based casino gambling in California, strongly supported AB 831. Four smaller tribes and the Social Gaming Leadership Alliance (SGLA) fought against the passage of the bill. The SGLA represents sweepstakes casino operators.
"Voters, players who love online social games, California tribes, and online social games operators all made their position clear," Jeff Duncan, SGLA executive director, said in a statement. "They didn’t want a ban on this popular, safe form of entertainment.
“We hoped that Gov. Newsom would see past the anti-competitive efforts of the powerful, well-funded tribes behind this bill and veto AB 831, but he chose the easy, short-sighted path and turned his back on choice, innovation, and economic gains.”
Estimates are that California accounts for 17% of the U.S. online sweepstakes casino market. Gaming consultant and market research firm Eilers & Krejcik forecasts California will be responsible for $790.5 million in sweepstakes casino revenue in 2025.
Projections are that the entire sweepstakes casino industry will generate gross gaming revenue of nearly $4.7 billion in 2025.
California is the seventh state to issue a law banning dual-currency online sweepstakes casino games. Connecticut, Delaware, Idaho, Michigan, Montana, and Washington previously passed similar bills into law. Ohio and Nevada have legislation pending. A bill in the New York State Senate to ban sweepstakes casinos is one step away from being delivered to the desk of Governor Kathy Hochul.
Several other states have issued cease-and-desist orders against sweepstakes casino sites operating in the state.
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