• The California Senate has unanimously passed Assembly Bill 831, a landmark piece of legislation that would ban online sweepstakes casinos in the state.
• The bill, which passed with a decisive 31-0 vote, now returns to the Assembly for a final concurrence vote before heading to Governor Gavin Newsom’s desk, where it is expected to be signed into law.
• The legislation has been driven by a powerful coalition of Native American tribes, who argue that unregulated sweepstakes platforms undermine the state’s legal, tribal-run gaming market.
• The move follows a recent lawsuit by the Los Angeles City Attorney against Stake.us, which has already prompted major B2B suppliers like Pragmatic Play and Playtech to exit the California sweepstakes market.
• California’s action is the most significant development yet in a growing, multi-state trend to close the perceived legal loophole that has allowed sweepstakes gaming to flourish across the US.

California is on the verge of outlawing online sweepstakes casinos after the state Senate passed Assembly Bill 831 with a unanimous and bipartisan 31-0 vote. The bill, which now requires one final procedural vote in the Assembly before going to the Governor, represents a massive blow to the sweepstakes gaming model in the United States.

The legislation is comprehensive in its scope. It not only forbids the operation of online sweepstakes casinos but also targets the entire ecosystem that supports them, including platform providers, payment processors, marketing affiliates, and financial institutions that knowingly facilitate their activities.

A Powerful Tribal-Led Coalition

The legislative push has been spearheaded by California’s powerful and influential Native American tribes. The bill was co-sponsored by major tribal organisations, including the California Nations Indian Gaming Association (CNIGA) and the Yuhaaviatam of San Manuel Nation.

They argue that the largely unregulated sweepstakes platforms, which are often based offshore, function as a de facto illegal online casino market. In a statement, the San Manuel Nation said, “Allowing unregulated and predatory sweepstakes operators to bypass these regulations undermines the trust and integrity of California’s gaming policies.” Assemblymember Avelino Valencia, the bill’s author, echoed this, stating that “many of these ‘sweepstakes’ operators are based offshore and function without proper oversight, avoiding requirements like consumer protections, responsible gaming safeguards, [and] background checks.”

An Industry Already in Retreat

The legislative momentum has been bolstered by recent, high-profile enforcement action. In late August, the Los Angeles City Attorney filed a civil lawsuit against the major sweepstakes operator, Stake.us, for illegal gambling.

The lawsuit had an immediate and chilling effect on the B2B supply chain. In its wake, a number of major game suppliers, including giants Pragmatic Play and Playtech, announced they were withdrawing their content from the California sweepstakes market to avoid legal risk. This exodus showed that the industry already viewed the model as untenable in the state, even before the passage of AB 831.

Part of a National Trend

California’s action is the most significant move yet in a national trend of states closing the legal loophole that sweepstakes operators have historically exploited. New Jersey and Connecticut have recently passed similar bans, and a number of other states have used enforcement actions to force operators out.

With the nation’s most populous state now on the brink of a full prohibition, the long-term viability of the sweepstakes casino model in the United States is facing an existential threat.