Eliminating the Grey Area
California is taking a hard swing at the online sweepstakes casino model. Assembly Bill 831 (AB 831), which targets platforms that use dual-currency systems to mimic casino-style gambling, just cleared the Senate Governmental Organization Committee with a 15-0 vote. It now heads to the Senate Public Safety Committee for another vote on July 15.
The bill, introduced by Assemblymember Avelino Valencia, aims to shut down a corner of the internet that’s thrived in legal limbo. These platforms typically let users purchase one set of virtual coins while awarding sweepstakes entries for a chance to win real money, thereby dodging traditional gambling regulations in the process.
“We cannot look the other way while these platforms exploit legal grey areas,” said Valencia. “These operations undermine the voter-approved framework that affirms Tribal governments’ sovereign right to conduct gaming in California.”
What AB 831 Actually Bans
AB 831 isn’t just going after the sweepstakes platforms themselves, it’s going after the whole operation. The bill targets any game or platform that uses a dual-currency model (like “gold coins” and “sweeps coins”) to simulate gambling, especially if there’s real money or cash-equivalent prizes on the line.
That includes:
- Casino-style gameplay like slots, poker, blackjack, bingo, or virtual sportsbooks
- Any system offering prizes tied to direct or indirect consideration. This covers everything from buying token packages to redeeming “free” spins
- And crucially, the bill doesn’t stop at the front end
It also goes after the support network that keeps these platforms running. That means:
- Payment processors
- Platform providers
- Geolocation services
- Gaming content creators
- Affiliate marketers
- Even celebrity endorsers are not spared.
Under AB 831, facilitating, processing, or promoting these sweepstakes-style systems could result in criminal penalties, including steep fines and even jail time.
Why It’s a Big Deal
AB 831 is more than just a rulebook tweak, it’s a political and economic statement. The bill has strong backing from California’s powerful tribal gaming nations, who argue that sweepstakes casinos threaten both their revenue and the legal integrity of gaming in the state.
“For over 25 years, tribal governments like Yuhaaviatam of San Manuel Nation have upheld the will of California voters by operating gaming with integrity,” said Chairwoman Lynn Valbuena of the Yuhaaviatam Tribal Council. “Illegal online gaming now threatens this foundation, compromising voter-approved law and putting Californians at risk.”
To tribal leaders, this fight isn’t about market share—it’s about protecting jobs, public services, and tribal sovereignty. The California Nations Indian Gaming Association (CNIGA), a co-sponsor of the bill, says unregulated platforms undercut everything tribes have built.
“These illegal platforms erase the benefits of regulated gaming while exposing consumers to serious risks,” said CNIGA Chairman James Siva. “AB 831 protects the economic engine that generates nearly $25 billion for California communities and supports more than 112,000 jobs statewide.”
To supporters, AB 831 is about protecting what voters approved, safeguarding consumer trust, and ensuring that gaming in California remains licensed, accountable, and locally reinvested.
Not Everyone’s Cheering
Not everyone’s applauding. Sweepstakes trade groups are furious, arguing that AB 831 is a rushed power play that could hurt legitimate businesses and consumer promotions.
“This isn’t how sound policy gets made,” said a spokesperson from the Social and Promotional Games Association (SPGA). “A last-minute effort to outlaw legal digital games, without public debate, expert input, or economic analysis, sends a chilling message to entrepreneurs, innovators and investors across the state.”
The SPGA also criticized the bill’s language, saying it’s so vague that it could criminalize common promotional tools used across multiple industries, including contests run by fast-food chains, retailers, and publishers.
The Social Gaming Leadership Alliance (SGLA), backed by sweepstakes giant VGW, doubled down on that critique. In a press release, Executive Director Jeff Duncan, a former U.S. Congressman, said:
“AB 831 was written by those with clear vested interests. Before shutting down a burgeoning digital-gaming scene, legislators should demand a full hearing on the economic impacts and consumer protections at stake.”
What to Watch
As AB 831 moves through the next committee, the stakes are high for sweepstakes operators, marketers, and service providers:
- Players in California may soon find their favorite platforms geoblocked or shut down.
- While affiliates, influencers, and payment providers could face liability just for doing business with these sites.
If passed, California would join states like Montana and Connecticut in issuing tough new limits or outright bans on sweepstakes casinos.
Blaise Luis
