Governor Newsom Approves Law Prohibiting Sweepstakes Casinos in California

It’s official: Governor Gavin Newsom signed AB 831 into law last October 12th, putting an end to speculations and stakeholder uncertainties. Introduced by Assemblymember Avelino Valencia (D-Anaheim), the bill aims to ban sweepstakes casino operations in the state and impose applicable penalties on their media affiliates and partner payment processors.

California’s new law takes effect on January 1, 2026, effectively addressing the legal grey areas previously exploited by sweepstakes casinos through its dual-currency model.

AB 831 Receives Strong Backing from Policymakers

The law introduced by Assemblymember Valencia initially faced resistance from industry stakeholders, but it surprisingly passed floor debates at the State Assembly and the Senate. AB 831 outlines a comprehensive law that prohibits the operations of sweepstakes casino operations and their whole supply chain, using clear and straightforward language.

According to Section 337o (a), “it is unlawful for any person or entity to operate, conduct, or offer an online sweepstakes game in this state”. The bill further explained that (b) It is unlawful for any entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to knowingly and willfully support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state”.

California’s Senate amended AB 831 in June, ultimately approving it last September 8th with a 36-0 vote. Then, the Senate Assembly unanimously passed the bill on September 12th, with a 63-0 vote. 

…But Gets Criticized by Industry Stakeholders

The sweepstakes casino industry found an ally in the Social Gaming Leadership Alliance (SGLA), an industry organization representing operators. According to SGLA, the bill could cause over $1 billion in economic losses annually due to missed tax revenues. 

The group adds that the bill boasts sweeping liabilities for any person, group, or organization that supports the operations of these games. Even media outfits like YouTube and Meta may face criminal liability if they become involved in the operations of sweepstakes casinos.

Nevertheless, many tribal gaming interests in the state supported the bill, which helped push for the unanimous approval of the bill.

Sweepstakes Casino Industry Continues to Lose Ground

Governor Newsom’s approval of AB 831 delivers a huge blow to the state’s sweepstakes casino operators and the broader industry in general. California isn’t the first state to ban these sites, but it’s the most populous and arguably the most lucrative market. Here’s a look at some of the states that have already banned the operations of sweepstakes casinos:

• Washington. There’s an explicit ban enforced by the Washington Gambling Commission.
  Michigan. State regulators issued cease-and-desist letters starting in 2023, with a full ban beginning in October 2023.
• Connecticut. The state’s legislature passed an anti-sweepstakes casino bill, effective in 2025.
• Montana. Montana’s anti-sweeps bill (SB555) was approved in October 2025.
• Nevada. State legislators passed their anti-sweepstakes casino law (SB 256), active since 2025.
• New Jersey. The state has pushed for the ban of sweepstakes casinos, awaiting approval as of October 2025.
• New York. The state’s legislature has passed S 5935, the ban’s effectivity subject to the Governor’s signature.
• Louisiana. State continues to issue cease-and-desist orders, and its anti-sweeps bill was passed but vetoed.

In addition to states with a complete ban, a few other states have enforced aggressive inquiries and actions against operators. For example, in Pennsylvania and  Maine, both states have used cease-and-desist orders and AG opinions.

REFERENCE

• Governor Gavin Newsom
• Senate Committee on Public Safety
• New York Attorney General
• Montana Free Press
• The New York State Senate