California lawmakers are pushing forward with legislation that could deal a major blow to the online sweepstakes casino industry. Assembly Bill 831, originally a minor amendment to tribal-state compact review timelines, has been completely rewritten by Assemblymember Avelino Valencia. Now, with strong backing from the California Nations Indian Gaming Association (CNIGA), the bill targets online gambling operations, explicitly outlawing casino-style sweepstakes.
The revised AB 831 directly names sweepstakes more than 20 times, emphasizing its new purpose. If passed, the bill would amend both the Business and Professions Code and the Penal Code to declare such games illegal and unfair business practices.
Expanding the Scope of Liability
The bill defines sweepstakes casinos broadly—covering games available online or via mobile that use a dual-currency system, simulate gambling, and offer cash or equivalent prizes. Its scope goes far beyond operators, extending penalties to any person or entity that supports sweepstakes gaming. That includes financial institutions, payment processors, geolocation services, content suppliers, platform providers, and even media affiliates.
Howard Glaser, global head of government affairs at Light & Wonder, compared the bill to legislation passed in New York. “A bill introduced (Friday) with the backing of the California Nations Indian Gaming Association follows similar lines as the New York legislation…,” he said.
Violators could face misdemeanor charges, a fine up to $25,000, and up to a year in county jail.
Exemptions for Retail Promotions
However, the bill does not impact typical non-cash promotions offered by retailers, such as grocery store sweepstakes. These forms of marketing remain legal, avoiding what’s commonly referred to as the “Starbucks argument” — concerns that laws might unintentionally criminalize everyday promotional giveaways.
Tribal Support and Industry Pushback
The bill is sponsored by the San Manuel Nation, which runs the Yaamava’ Resort and Casino. Interestingly, the resort promotes online sweepstakes like “The Factory Sweepstakes,” offering casino credit prizes rather than direct cash. While these may comply with the current legal framework, the bill’s broad language could raise questions about such offerings moving forward.
Victor Rocha, chairman of the Indian Gaming Association, has been a fierce critic of sweepstakes gambling, viewing it as an attack on tribal exclusivity. Tribal leaders have long argued that sweepstakes casinos operate in legal gray areas that threaten their constitutional rights to exclusive gambling operations.
The Social Gaming Leadership Alliance (SGLA), whose members include VGW and payment firm Nuvei, defended sweepstakes, claiming lawmakers were misled. “Lawmakers fell for a campaign of deliberate misinformation from parties with clear vested interests that was designed to eliminate legitimate competition,” the group said.
Should the bill pass, California would become the third state to implement a formal ban on online sweepstakes casinos, joining Connecticut and Montana. The move follows recent enforcement actions in Louisiana and Mississippi and mirrors sweeping regulatory trends nationwide.
Ongoing Tribal Disputes Over Casino Expansion
Separately, the state has sued the federal government over a planned casino by the Koi Nation near Windsor. The lawsuit challenges the Department of Interior’s approval process, with Governor Gavin Newsom arguing that the “restored lands” exemption under the Indian Gaming Regulatory Act was improperly applied without state consultation.
Source:
“California tribes pivot existing gaming bill into anti-sweepstakes effort”, sbcamericas.com, Jun 24, 2025
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