In 2025, California lawmakers have introduced a powerful new bill aimed at banning online sweepstakes casinos, setting the stage for a pivotal battle over online gambling regulation. The bill, led by Assemblymember Avelino Valencia and backed by the influential California Nations Indian Gaming Association (CNIGA), targets a growing segment of the gaming industry that tribes view as a direct threat to their exclusive right to operate gambling in the state.

AB 831: a major shift in anti-sweepstakes efforts:

Originally a minor piece of legislation, Assembly Bill 831 (AB 831) has undergone a significant transformation. Initially introduced to amend California’s tribal-state compact law, AB 831 has now evolved into a sweeping measure aimed explicitly at outlawing all forms of online gambling related to sweepstakes casinos. The bill includes direct references to “sweepstakes” no fewer than 20 times and outlines its primary goal: to curb what is perceived as illegal gambling by shutting down the operations of online casinos that simulate traditional casino games.

AB 831, if passed, will amend both the Business and Professions Code and the Penal Code, explicitly labeling online and mobile sweepstakes as unfair and unlawful gaming practices. It defines a sweepstakes game as any online or mobile game that utilizes a dual-currency system of payment, offers cash or cash equivalents as prizes, and simulates casino-style gambling. This includes games like slots, video poker, and sports betting, which have gained increasing popularity in recent years.

In a move designed to target all facets of the sweepstakes casino ecosystem, the legislation doesn’t just go after operators and promoters. It also aims at various service providers that enable such operations, including financial institutions, geolocation providers, media affiliates, and payment processors. This is similar to legislation passed in New York, which also sets its sights on those who indirectly support online sweepstakes games, including celebrity endorsers like Ryan Seacrest and Paris Hilton who have publicly promoted sweepstakes brands.

One key aspect of AB 831 is its strict penalties. Anyone found in violation of the proposed law could face misdemeanor charges, fines up to $25,000, and up to one year in county jail. However, the bill does not target traditional promotional sweepstakes, such as those used by retailers like McDonald’s or Starbucks, which offer free-to-play games without cash prizes.

The introduction of AB 831 has sparked fierce reactions from California’s tribes, who argue that sweepstakes-style casinos violate the state constitution by offering gambling outside of tribal jurisdiction. California’s tribal gaming laws give exclusive rights to Native American tribes to operate casinos, and many tribal leaders view sweepstakes as an encroachment on their sovereignty and revenue streams.

Victor Rocha, chairman of CNIGA, has been a vocal critic of the sweepstakes industry, calling these operations a “gray-market scheme” that undermines the integrity of California’s gaming laws. The push for this new bill comes after years of complaints from tribes that online sweepstakes casinos have flourished without adequate legal oversight, and after multiple enforcement actions from other states, including New York and Louisiana.

Industry pushback and challenges:

As expected, the sweepstakes industry has not taken kindly to the proposed ban. The Social and Promotional Games Association (SPGA), which represents various sweepstakes operators, has criticized the bill, calling it an overreach that could stifle innovation. The SPGA argues that such legislation could even impact non-gambling promotions like McDonald’s Monopoly game, which relies on similar mechanisms to sweepstakes casinos.

One of the most vocal criticisms of AB 831 came from the SPGA, which expressed concern about the “backroom deal” nature of the legislation, claiming it was rushed through the legislative process without sufficient public debate. Despite these criticisms, tribal groups have rallied in support of the bill, arguing that it is crucial to protect their exclusivity and sovereignty under the state constitution.

As stated by SBC Americas, California’s efforts to ban sweepstakes casinos are part of a broader national movement against online gambling operators in this space. In recent months, several states, including New York, Connecticut, and Louisiana, have either passed or proposed similar legislation aimed at curbing sweepstakes gambling. While some states, such as Louisiana, have seen vetoes or delays in passing such bills, the momentum for regulation is undeniably building.

If California successfully passes AB 831, it would become the third state to enact a ban on sweepstakes casinos, following Connecticut and Montana. The legislation, however, is not without its challenges. While the bill has widespread support within the tribal gaming community, it still needs to pass through California’s legislative process, which could take several months.