Sweepstakes operators are retreating across the U.S. as new legislation targets unregulated gaming, with California taking the most aggressive stance. Last weekend, Governor Gavin Newsom signed Assembly Bill 831, designed to dismantle the sweepstakes industry and hold operators, payment processors, and celebrity endorsers accountable. Backed by the California Nations Indian Gaming Association, the law takes effect January 1.
“The effort by the tribes is like nothing I’ve ever seen in 45 years,” said Howard Glaser, Global Head of Government Affairs and Legislative Counsel at Light & Wonder, during a webinar hosted by the Indian Gaming Association. “This was a well-thought-out, executed, and funded campaign that brought together all the tribes, associations, suppliers, commercial operators, and sports betting and responsible-gaming advocates. It shows you what the industry can do when it stands together. I think it’s a powerful statement.”
Since the campaign began at G2E last year, 17 states have outlawed sweepstakes gambling, and six others have effectively restricted it through existing laws, Glaser said. “It’s 23-0 and 50% of the population in the U.S. Once you parse through the dual currency and the rest of that nonsense, it’s gambling. It’s paying money for a chance to win money.”
California law heightens legal risk
Glaser emphasized that California’s law, covering payment processors, suppliers, investors, and affiliates, places operators at unprecedented legal risk. “They will evolve it a bit, but for the most part it’s been a successful effort. California was the most important piece. It’s the most populous state with 20% of sweepstakes revenue and $100 million in advertising going in there.”
He noted sweepstakes gaming is just one segment of illegal online gambling. “There’s an immense consumer demand for online gambling… The illegal operations will proliferate. It was sweepstakes yesterday. It’s prediction markets today. It’ll be something else tomorrow, unless you address that underlying dynamic.”
Glaser also estimated $40 billion in online sports wagering takes place annually in California. “This is a business that exclusively belongs to the tribes… somebody is going to capture those customers and you’ll keep playing whack-a-mole,” he said.
Tribal leaders demand enforcement
Gaming attorney Scott Crowell said providing legal access for players is key to curbing the illegal market. Victor Rocha, Conference Chairman of the Indian Gaming Association, stressed that passing legislation is only phase one. “Phase two is enforcement and disgorgement. Anything less than that’s a failure,” he said.
Michael Hoenig, VP and Associate General Counsel of the Yuhaaviatam of San Manuel Nation, hopes California Attorney General Rob Bonta will act to cut off sweepstakes operations through platform providers and payment processors. Crowell noted that swift passage of the bill prompted major operators and suppliers to exit the market. Enforcement actions from Michigan, Arizona, and Massachusetts also helped.
“The tide has turned and the California legislation will be looked at as maybe the key turning point,” Crowell said. “AG Bonta needs to wake up and make enforcement against sweepstakes, unlawful internet gaming, and all the various forms a priority.”
Source:
“Sweepstakes operators fleeing California and other states”, cdcgaming.com, October 15, 2025
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