Written by Chloe Marsh
Reviewed by Ryan CarriganOne of the most significant changes to California gambling law in recent memory continues to ripple through the market. Assembly Bill 831, signed by Governor Gavin Newsom in October 2025, banned online sweepstakes casino style gaming and took effect at the start of this year. The law amended the California Gambling Control Act to close the promotional game exemption that sweepstakes operators had previously relied on.
Under the new framework, any platform offering virtual currency that can be redeemed for cash prizes is treated as unauthorized gambling, regardless of whether a free entry method exists. That definition struck at the core of the sweepstakes business model, which had long depended on the argument that dual currency systems placed it outside the reach of gambling regulation.
Broad Liability Provisions
What makes AB 831 notable is the breadth of its liability provisions. The law makes it unlawful for a wide range of parties to knowingly support the operation or promotion of an online sweepstakes game in the state. That list reportedly extends to financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates. Continued operation after the effective date can carry criminal penalties.
The practical result was a rapid exit. Major sweepstakes platforms wound down California access before the law took effect, removing a category of play that had operated in a gray area for years. We have watched the affiliate and supplier ecosystem adjust accordingly, since the statute reaches beyond the operators themselves to the businesses that enable them.
The measure was co sponsored by tribal gaming interests, who had argued that sweepstakes platforms mimicked casino games while sidestepping the regulatory structure that governs licensed gambling in the state. For tribes, the campaign against sweepstakes sits alongside their broader effort to challenge daily fantasy sports and prediction markets.
We view AB 831 as a marker of where California is heading. The state has shown a clear willingness to define emerging online gambling products as unauthorized and to hold the surrounding business network accountable. Operators and affiliates that serve California should treat the law as a signal that novel workarounds are likely to face firm resistance.
