California Sweepstakes Prohibition Bill Moves Forward to Senate Floor

• A bill to ban dual-currency sweepstakes game in California now heads to the Senate floor
• The California Senate Committee on Appropriations approved AB 831 by a 7-0 vote
• Several California tribes, plus Publishers Clearing House, do not support the measure

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A bill to ban dual-currency sweepstakes contests in California has been moved forward by a Senate committee to the Senate floor.

The California Senate Committee on Appropriations approved AB 831, a bill to ban dual-currency sweepstakes games in California by a unanimous 7-0 vote.

Assemblymember Avelino Valencia’s (D-68) bill prohibits dual-currency sweepstakes contests resembling casino and sports betting games in the state. It now heads to the Senate floor where it may potentially be approved and sent to Gov. Gavin Newsom (D) to be signed into law.

California Dual-Currency Sweepstakes Games Under Microscope

Today’s hearing on the bill did not include testimony or comments from the public. Committee Chairwoman Sen. Anna Caballero (D-14) simply read a short description of the bill and the committee then unanimously voted to approve the legislation.

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.

In addition to prohibiting dual-currency sweepstakes games, the bill outlines potential 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 bill also outlines the type of sweepstakes games that will be prohibited in California. Games 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.

While the legislation is backed by the California Nations Indian Gaming Association (CNIGA), several tribes broke rank and have spoken out against the bill. The Sherwood Valley Band of Pomo Indians, Big Lagoon Rancheria, and Kletsel Dehe Wintun Nation Tribe all submitted letters of opposition to the committee prior to today’s vote.

“While we have established gaming operations, smaller tribal enterprises like ours often lack the scale and resources of large, well-established gaming operations that dominate prime markets. Policies such as those proposed in AB 831 restrict emerging digital commerce opportunities that could provide essential supplemental revenue streams, effectively limiting the economic diversification options available to tribes like ours to the advantage of wealthier tribes aligned with powerful gaming interests,” Buffey W. Bourassa, secretary of the Sherwood Valley Band of Pomo Indians, wrote in the tribe’s opposition letter.

Publishers Clearing House Spoke Out Against Bill

Additionally, perhaps the most well known sweepstakes operator, Publishers Clearing House, also submitted a letter of opposition to the Senate Committee.

Sweepstakes promotions are lawful marketing mechanisms that encourage optional in-game purchases of virtual tokens to enhance gameplay on online platforms, Owen O’Donoghue, CEO of Publishers Clearing House, noted in the company’s letter.

Publishers Clearing House supports “reasonable regulation and urge a collaborative approach” to developing a regulatory framework to protect consumers and preserve economic opportunities in the Golden State.

The legislation is too ambiguous and criminalizes a lawful marketing tool, O’Donoghue wrote.

“AB 831’s criminalization—not regulation—of our operations, promotions, and even indirect support (including advertisers, payment processors, geolocation providers, and media platforms like Google, Meta, and YouTube) threatens to eliminate good-paying jobs and erase this economic impact. Section (b) of the bill imposes unprecedented criminal liability on service providers, requiring them to monitor promotional activities without clear definitions, safe harbor provisions, or reasonable compliance standards. This would stifle innovation and unfairly punish association rather than intent,” he wrote.