Well, it finally happened. California officially pulled the plug on sweepstakes casinos. Governor Gavin Newsom just signed AB 831, a bill that makes those “play-for-fun-but-also-win-cash” platforms flat-out illegal.
Starting January 1, 2026, it’ll be a crime to run, promote, or even process payments for an sweepstakes casino that walks and talks like the real thing.
The Great Coin Trick That Failed
Sweepstakes casinos have always lived in this weird gray zone, technically not “gambling” because the coins you buy aren’t directly redeemable.
If you’ve ever played on sites like Stake.us or WOW Vegas, you know the drill. You buy Gold Coins to play games for fun and then get some Sweeps Coins on the side—the ones you can actually cash out for real money.
Operators called it “a promotion.” Regulators called it “a loophole.” California just called it illegal.
AB 831 wipes out that dance entirely. The new law bans not only the sites but also the entire ecosystem, like the payment processors, marketers, and affiliate partners helping to push them. Break the rule, and you could be looking at $25,000 in fines or even jail time.
Who Wanted This So Badly?
Tribal casinos were cheering the loudest for this one. They’ve got exclusive rights to most gambling in California, and these online sweepstakes sites were dipping into that space without paying taxes or following gaming laws.
For tribes, AB 831 is about fairness—a way to stop offshore operators from siphoning money.
Lawmakers also said it’s about consumer protection. Most of these platforms aren’t regulated, don’t verify ages, and don’t offer responsible gaming tools. If you had a problem, there wasn’t much recourse—the servers were often offshore.
Assembly member Avelino Valencia, who sponsored the bill, summed it up perfectly, saying:
“If you’re offering gambling in California, you need a license.”
And Who’s Not Happy About It?
The Social Gaming Leadership Alliance (SGLA), the trade group for sweepstakes operators, is fuming. They claim the bill’s too broad and rushed, warning it might even sweep up harmless brand contests or promotional giveaways.
In response to the bill, SGLA Executive Director Jeff Duncan said:
“Today’s hearing exposed the committee’s complete disregard for facts, economic reality, and the voices of tens of thousands of Californians, all to hand monopoly power to tribes that have already invested hundreds of millions of dollars in Las Vegas and California coastal properties.”
Some platforms have already started blocking California players. Others are scrambling to pivot into “just-for-fun” mode to no cashouts, just points, prizes, and vibes. But with this law, any game that feels even remotely like gambling could still raise red flags.
Different Coasts, Same Verdict
Both California and New Jersey just kicked sweepstakes casinos out, but the “why” couldn’t be more different. California did it to protect its tribal nations. AB 831 was a way to guard the exclusive casino rights that tribes fought hard for.
New Jersey’s reason was more about money and order. The state already has a booming online casino market that’s legal, taxed, and tightly run. To them, sweepstakes casinos looked like messy copycats that could confuse players and chip away at revenue.
Analysts expect more states to follow. Montana, Connecticut, and New Jersey have already tightened rules this year. And with California being such a huge market with roughly 17% of the national sweepstakes scene, this could be the domino that changes the entire game.
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