California Moves to Ban Sweepstakes Casinos

California Lawmakers Approve Sweepstakes Casino Ban, Bill Heads to Governor

California lawmakers have passed Assembly Bill 831 (AB831), a measure that would ban sweepstakes casinos in California. The bill now heads to Governor Gavin Newsom’s desk for approval.

What AB831 Means for Sweepstakes Casinos

The legislation makes it a misdemeanor to operate or knowingly support dual-currency sweepstakes casino sites. These platforms often mimic online casinos or sportsbooks by offering two types of virtual currency:

• Gold Coins – used for free play with no cash value

• Sweeps Coins – which can be redeemed for real-money prizes

Lawmakers say these models exploit loopholes to provide unregulated gambling in California.

Strong Tribal Support, But Some Opposition

The bill passed the Assembly in a unanimous 63-0 vote. It is backed by the California Nations Indian Gaming Association and many tribal groups. However, four tribes opposed AB831, arguing the legislation was rushed and could limit tribal economic opportunities.

Opponents also raised concerns about the impact on legitimate sweepstakes promotions from companies like McDonald’s and Starbucks. Lawmakers added an amendment to exempt the California Lottery and traditional sweepstakes promotions.

Nationwide Crackdown on Sweepstakes Casinos

California is not alone. Other states – including Connecticut, Montana, and New Jersey — have already passed similar bans. Meanwhile, regulators in states such as Arizona, Michigan, and Louisiana have issued cease-and-desist letters to sweepstakes operators.

In New York, Governor Kathy Hochul has yet to sign a similar bill, though the Attorney General has already issued multiple enforcement actions.

Market Outlook for Sweepstakes Casinos

Industry analysts expect these legal challenges to slow the growth of the U.S. sweepstakes casino market. Research firm Eilers & Krejcik Gaming lowered its 2025 revenue forecast from $4.7 billion to $4 billion, with a potential decline projected for 2026.

Key Takeaway

If signed into law, California’s sweepstakes casino ban will make the state one of the strictest jurisdictions in the country for unregulated online casino operators. With nationwide scrutiny increasing, the future of sweepstakes casinos in the U.S. looks increasingly uncertain.