Will he or won't he? That's the question on the minds of stakeholders in the California gambling industry as the deadline nears for Governor Gavin Newsom to sign Bill AB 831 into law, or veto the bill.
This bill would ban sweepstakes casino operations in the state. Newsom has until October 12 to make a decision. However, it's worth noting that there's a third option available to him.
Newsome could choose not to sign or veto the bill. If he chooses this third path and takes what is known as a no-action stance, Bill AB 831 would still become law as of January 1, 2026.
Tribal leaders, who have led the fight to ban sweepstakes casinos, are convinced that for political reasons, it's the latter option that Newsom will choose. They believe that Newsom will avoid becoming a major player in the issue so as not to harm his Presidential aspirations.
“He wants to be president, so he doesn’t want to [upset] the 18-35 demographic,” Victor Rocha, conference chair of the Indian Gaming Association (IGA), said during an appearance on the IGA's New Normal webcast.
“I would say he lets this thing go. He doesn’t sign it, it becomes law, and everybody wins except the sweepstakes.”
Newsom actually finds himself in a very difficult position. On the one hand, he will certainly recognize the popularity of sweepstakes casinos. A study conducted by industry analysts Eilers & Krejcik Gaming estimated that social casinos with sweepstakes will generate $14.31 billion in sales across the USA in 2025, of which California accounts for $2.42 billion.
In California, social casinos with a sweepstakes option generate more than $1 billion in combined direct and indirect benefits to California annually. The industry, directly or indirectly, is responsible for employing nearly 1,200 people in the state.
As the most populous state in the USA, any legal decision made about sweepstakes casinos in California will be precedent-setting. It will have ripple effects across the country.
Based on Newsom's ongoing social media criticisms of US President Donald Trump, it seems evident that Newsom is planning to run for the Democratic Presidential nomination for the 2028 election. Any action that he takes that disrupts a major industry, such as the sweepstakes casino industry, will certainly be handy fodder for his political opponents.
At the same time, California's tribes have traditionally been significant financial backers of Newsom's political campaigns. The Los Angeles Times reports that since Newsom first ran for governor in 2017, the state’s tribes have contributed more than $7 million to his campaigns. Drawing their ire would also not be in his best interests.
Last year, Newsom signed into law a bill that allowed California's tribes to sue their rivals in the gambling industry. Currently, there are pending lawsuits filed by the state's tribes against California's independently operated card rooms.
Another potential solution to this problem is being put forth by the Social Gaming Leadership Alliance (SGLA), a lobby group representing the sweepstakes casino industry. They suggest that the two sides work together to establish regulations governing sweepstakes casino operators.
“The industry on its own has adopted responsible gaming measures, play limits, has user verification, has age verification,” said Bill Gantz, a lawyer representing the SGLA.
The SGLA estimates that a regulated social casino industry could generate as much as $300 million annually for the state coffers through licensing fees and tax revenue.
If Newsom chooses the no-action option, the two sides would have until the end of the year to come up with a compromise.
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