California becomes the largest U.S. state to outlaw sweepstakes casinos, with a sweeping new law set to take effect in 2026.
Governor Gavin Newsom has signed Assembly Bill 831 (AB 831) into law, officially banning sweepstakes gambling across California beginning 1 January 2026. The measure, which passed both chambers of the legislature unanimously, represents one of the most significant regulatory crackdowns on the unregulated sweepstakes sector in U.S. history.
Under AB 831, sweepstakes casino operators and their business partners including payment processors, financial institutions, geolocation services, and media affiliates will be prohibited from conducting or supporting such activities. Violators face fines of up to $25,000 and possible jail time of up to one year.
The bill, introduced by Assemblymember Avelino Valencia, gained strong backing from California’s tribal gaming groups, including the California Nations Indian Gaming Association (CNIGA) and the Indian Gaming Association (IGA). CNIGA Chairman James Siva hailed the law as a “top legislative priority” to safeguard tribal sovereignty and maintain the integrity of California’s regulated gaming system.
Supporters argue that sweepstakes operators have used dual-currency models where players purchase “gold coins” and redeem “sweep coins” for cash, to mimic casino experiences without regulation. The new law aims to eliminate these loopholes and preserve fair competition for licensed tribal and commercial operators.
Opposition came from the Social Gaming Leadership Alliance (SGLA), which claimed the ban would destroy a $1 billion industry and reduce potential tax revenue. Some smaller tribes also voiced concerns about the bill’s economic impact on remote communities.
California joins Montana, Connecticut, and New Jersey, which enacted similar measures earlier in 2025, as states move to rein in the unregulated sweepstakes casino sector.
Analysts say AB 831 reinforces California’s position as a national leader in gaming regulation, signaling that unlicensed digital gambling platforms face increasingly limited room to operate.
