Gov. Newsom Signs California Sweepstakes Prohibition Bill Into Law

• Gov. Gavin Newsom (D) signed AB 831 into law Saturday
• The bill prohibits all dual-currency sweepstakes games in the state
• The legislation will go into effect on Jan. 1

A California sweepstakes prohibition bill has been signed into law by Gov. Gavin Newsom (D) after not receiving a single vote against it throughout its legislative process.

Gov. Newsom signed Assemblymember Avelino Valencia’s (D-68) bill AB 831 into law Saturday, ahead of its midnight deadline, to prohibit dual-currency sweepstakes contests resembling casino and sports betting games.

The bill will go into effect on Thursday, Jan. 1, 2026.

Dual Currency Sweepstakes Games Prohibited

Valencia’s bill, originally dealing with tribal state gaming compacts, was overhauled in late June to make it unlawful for any person or entity to operate, conduct, or promote a dual-currency online sweepstakes game that mimics casino games or sports betting.

The bill officially sets fines and punishments for those who offer the games.

“The bill would make a person who violates these provisions guilty of a misdemeanor punishable by a fine not less than $1,000 nor more than $25,000, or by imprisonment in the county jail not exceeding one year, or by both the fine and imprisonment,” according to the legislation.

The state now officially prohibits dual-currency sweepstakes games, which are contests that allow a person to purchase “sweepstakes coins” or other types of sweepstakes currency that allows the user to win a prize, award, cash, or cash equivalents will be prohibited.

Additionally, any games that simulate gambling or play a gambling-themed game, such as slot machines, video poker, casino-style table games such as blackjack, roulette, craps, and poker, will be prohibited.

The California Senate unanimously approved the bill by a 36-0 vote in September and made a key amendment. Senate members amended the bill to specify the legislation will not criminalize state lottery games or traditional sweepstakes promotions. The approved amendment from the Senate is as follows:

“This bill would specify that these provisions do not make unlawful or otherwise restrict lawful games and methods used by a gambling enterprise licensed under the Gambling Control Act or operations of the California State Lottery. The bill would specify that these provisions do not make unlawful game promotions or sweepstakes conducted by for-profit commercial entities on a limited and occasional basis as an advertising and marketing tool that are incidental to substantial bona fide sales of consumer products or services and that are not intended to provide a vehicle for the establishment of ongoing gambling or gaming.”

The California Assembly also unanimously approved the amended bill in September by a 63-0 vote.

Social Gaming Leadership Alliance Decries Legalization

The Social Gaming Leadership Alliance (SGLA) expressed disappointment in Newsom signing the bill into law

The alliance reported that California Tribes such as Kletsel Dehe Wintun Nation, the Sherwood Valley Rancheria of Pomo Indians, the Mechoopda Indian Tribe of Chico Rancheria, and Big Lagoon Rancheria opposed the bill because it would limit economic opportunities available to tribes lacking the resources of wealthier gaming tribes and encroach on their tribal sovereignty. 

Additionally, according to the SGLA the bill may eliminate $1 billion in annual economic impact in the state from online social games with sweepstakes and will miss out on at least $200 million to $300 million annually from potential regulation and taxation of the industry.

“Voters, players who love online social games, California tribes, and online social games operators all made their position clear: they didn’t want a ban on this popular, safe form of entertainment,” said Jeff Duncan, Executive Director of SGLA. “We hoped that Governor Newsom would see past the anti-competitive efforts of the powerful, well-funded tribes behind this bill and veto AB 831, but he chose the easy, short-sighted path and turned his back on choice, innovation and economic gains.”