California Bans Sweepstakes Casinos as Newsom Signs AB 831; Law Takes Effect Jan. 1, 2026

California has become the latest state to outlaw online sweepstakes casinos after Gov. Gavin Newsom signed AB 831 into law on October 11. The measure, which didn’t receive a single opposition vote in the Legislature, will take effect on January 1, closing a gray area long exploited by unregulated sweepstakes casinos.

What AB 831 Does

The new law makes it illegal for anyone to “knowingly and willfully” engage in, promote, or facilitate sweepstakes casinos that use dual-currency systems. The dual-currency format typically uses “gold coins” for entertainment and “sweeps coins” redeemable for cash prizes.

Enforcement extends to payment processors, geolocation providers, and affiliates that facilitate access for California players. The bill also imposes criminal penalties, including fines and potential jail time, for violators.

Supporters, including the bill sponsor Assemblymember Avelino Valencia and over 50 California Native American tribes, framed the bill as a step toward protecting the state’s regulated gaming framework and ensuring fairness for licensed operators.

While most sweepstakes casinos have yet to react to the newly signed law, a few, including Carnival Citi, High 5 Casino, Ruby Sweeps, and Dara Casino, have stopped accepting players from California.

Road to the Signature

AB 831’s path through the Legislature was swift and decisive. The bill advanced without recorded opposition votes but faced criticism from a broad coalition of industry stakeholders.

The Social and Promotional Games Association (SPGA), representing sweepstakes operators, warned that the measure was overly broad and risked banning legitimate promotional gaming. They further argued that the bill “would destroy a thriving $1 billion California industry.”

Civil liberties groups, including the ACLU, and advertising trade associations raised concerns about potential overreach in marketing campaigns.

Some geographically isolated tribes also voiced reservations. Kletsel Dehe Wintun Nation, the Sherwood Valley Rancheria of Pomo Indians, the Mechoopda Indian Tribe of Chico Rancheria, and the Big Lagoon Rancheria argued that the process sidelined smaller or non-gaming tribes that rely on economic diversity.

However, leading tribal organizations, such as the California Nations Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nations, strongly supported the ban. They framed it as critical to maintaining the integrity of California’s gaming compact system.

There were some speculations about whether Gov. Newsom would sign the bill. They suggested that he might allow it to become law without his signature, given his national profile and potential political aspirations beyond California.

However, his signature on October 11 put an end to that speculation and underscored the state’s firm stance on unregulated gambling.

States That Have Banned Sweepstakes Casinos in 2025

California joins a fast-growing list of states that have explicitly banned online sweepstakes casinos this year:

• Montana: SB 555 took effect October 1, outlawing unlicensed online gambling, including sweepstakes casinos.
• Connecticut: Gov. Ned Lamont signed SB 1235 in June, formally prohibiting sweepstakes-style online gaming. The law took effect on October 1.
• New Jersey: Gov. Phil Murphy approved A5447 in August, criminalizing unregulated sweepstakes casino operations. The law took effect immediately.
• Nevada: While not explicitly banning sweepstakes casinos, regulators implemented SB 256 this summer, tightening enforcement and closing the door on sweeps-style games.
• New York: The Legislature passed S5935A in June, but Gov. Kathy Hochul has not yet signed the measure. Still, regulatory enforcement actions by New York Attorney General Letitia James have led most platforms to exit the state.

These states join Washington and Idaho, which already had bans in place. The list could grow further as prohibition bills remain active in Massachusetts and Ohio. The latter’s legislative session extends into 2026, while in Massachusetts, it concludes on November 19.

Several legislative efforts failed this year, including in Florida, Arkansas, Louisiana, and Mississippi.

States Increasing Enforcement Without New Laws

Even in states without formal bans, regulators and attorneys general have escalated enforcement actions against unlicensed sweepstakes casinos.

• While the Louisiana governor vetoed a ban bill, regulators and the Attorney General have issued more than 40 cease-and-desist letters, and at least that many operators have already exited the state.
  The Delaware gaming regulator’s enforcement actions have led to over 30 operators ceasing operations in the state.
• West Virginia’s attorney general subpoenaed 47 operators, prompting at least 30 to exit the state entirely.
• Maryland ordered multiple platforms, including major sweepstakes casino brands, to stop accepting players earlier this year. At least 20 have complied.
• Arizona’s Department of Gaming expanded its crackdown throughout the summer, warning that sweepstakes games fall under the state’s gambling prohibitions.
• While legislative efforts failed, Mississippi’s Gaming Commission followed with similar actions in June, signaling a coordinated national trend.
• Multiple class-action lawsuits in Alabama have resulted in at least a dozen operators leaving the state.

With California’s law now on the books, sweepstakes casino operators face a shrinking US market. It is likely to continue decreasing in size, as legislative and regulatory enforcement is expected to persist in 2026.