The Final Seal
The law, signed on October 11, introduces sweeping penalties not only for operators but also for affiliates, technology providers, payment processors, and other partners involved in supporting dual-currency gaming platforms. The ban takes effect on January 1, 2026, and targets the specific model used by platforms like Chumba, Pulsz, and McLuck, which allow players to redeem virtual “Sweeps Coins” for cash prizes.
A Unanimous Decision in Sacramento
AB 831 passed through California’s legislature without a single opposing vote — a rare bipartisan moment in a contentious gaming space. The bill leaves room for conventional promotional campaigns like McDonald’s Monopoly or Starbucks Rewards but draws a clear legal line: any product that enables the redemption of digital currency for real money is now considered illegal gambling.
Violations could lead to fines of up to $25,000 and potential criminal charges for all parties involved in operating, promoting, or facilitating such platforms.
Tribal Advocacy Was Key to the Bill’s Passage
The push for the bill came largely from California’s tribal gaming coalition, led by prominent voices like Victor Rocha, chair of the Indian Gaming Association. Tribes argued that sweepstakes casinos posed an unregulated threat to their revenues and were exploiting legal loopholes to offer real-money-like gameplay without licensing or taxation.
Although some smaller tribes voiced concern — pointing to social gaming as one of their few viable economic ventures — the overall momentum of the bill was decisive. By the time it reached Newsom’s desk, opposition had largely faded.
Industry Response: Legal and Economic Concerns
The Social Gaming Leadership Alliance (SGLA), which represents the sweepstakes casino industry, responded swiftly and critically. Executive Director Jeff Duncan called the move a capitulation to powerful interests, stating:
“We hoped 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.”
The SGLA argues that the ban will eliminate $1 billion in annual economic activity, affecting not only operators but also affiliates, contractors, developers, and customer support teams. Legal challenges are reportedly being considered, with concerns that California’s move could set a dangerous precedent for other states.
Signs of the Crackdown Were Already Visible
Even before the bill was signed, the landscape had begun to shift. Major suppliers like Evolution, Hacksaw Gaming, and Pragmatic Play had already exited the California market following legal pressure from the Los Angeles City Attorney’s office. Operators such as VGW, McLuck, and Hello Millions began blocking California users months ago, anticipating regulatory changes.
Now, smaller affiliates, content creators, and tech partners are assessing their risk exposure and re-evaluating contracts.
Analysts Say This Marks a Turning Point
In a recent report, Macquarie Research predicted that momentum was moving against sweepstakes-style models, citing investor fatigue, supplier exits, and increasing legal scrutiny. California’s decision adds weight to that assessment.
It becomes the seventh U.S. state to explicitly ban sweepstakes casinos, joining New Jersey, Connecticut, Montana, Michigan, Idaho, Delaware, and Washington. Additional legislation is reportedly under review in Ohio, Nevada, and Montana (again, under a separate legal interpretation).
Economic Fallout: Billions on the Line
A report by Eilers & Krejcik Gaming, commissioned by the SGLA, estimates that California’s ban could impact up to $1 billion in economic value — including job losses, affiliate commissions, legal contracts, and tax revenue.
Supporters of the bill argue that those costs are outweighed by the benefit of protecting consumers and strengthening the integrity of regulated gaming. Critics say it restricts player choice and penalizes legitimate innovation in the social gaming space.
What This Means for Players and Businesses
- Players: You’ll need to redeem any Sweeps Coins by December 31, 2025. After that date, operators are expected to geoblock California residents completely.
- Affiliates: Take down any California-facing promotions, even indirect. Advertising now carries real liability under the new law.
- Suppliers and Partners: Review all integrations with sweeps platforms. The new legal language leaves little room for ambiguity.
A Model Under Fire Nationwide
What happens in California rarely stays in California — and AB 831 could serve as a model for similar efforts in other jurisdictions. By specifically targeting the dual-currency sweepstakes format, the law creates a framework that other states can easily replicate.
For operators still clinging to the argument that their platforms are “not real gambling,” the tide may be turning. AB 831 sends a strong message: the dual-currency model, once considered legally creative, is increasingly being viewed as a legal liability.
Key Takeaway
California’s new law doesn’t just challenge the legality of sweepstakes casinos — it threatens the foundation of their business model. For the companies, platforms, and partners that built their success on this structure, the window for adaptation is rapidly closing.
Blaise Luis
