California Passes Bill to Regulate Online Gaming

California, September 27, 2025

News Summary

California has passed Assembly Bill 831 aimed at banning online sweepstakes casinos, receiving unanimous bipartisan support. The bill, authored by Assemblymember Avelino Valencia, addresses concerns around unregulated online gaming and is currently awaiting Governor Gavin Newsom’s approval. If signed, the law will take effect on January 1, 2026, imposing significant penalties on violators, while supporters argue it protects established gaming frameworks in the state. However, some tribes and operators oppose the bill, citing potential risks to smaller tribal economies.

California has taken a significant step towards regulating the online gaming landscape by passing Assembly Bill 831, a measure aimed at outlawing online sweepstakes casinos. The bill has garnered unanimous bipartisan support, receiving approval from both chambers of the California Legislature without opposition. It was authored by Assemblymember Avelino Valencia from Anaheim and approved in the Assembly with a 79-0 vote on September 12. The bill now awaits the decision of Governor Gavin Newsom, who has until October 12 to sign it into law. If enacted, the legislation will take effect on January 1, 2026.

The primary aim of AB 831 is to address the rise of online sweepstakes casinos, which generate revenue by simulating casino games and offering redeemable prizes to users. The bill extends liability to multiple parties involved in this industry, including operators, payment processors, affiliates, and companies that support sweepstakes activities. Those found violating the law could face penalties including misdemeanor charges, fines of up to $25,000, and even up to one year in county jail.

Supporters of the bill argue it protects the established framework of regulated gaming in California, which has allowed tribal governments exclusive rights to operate casino-style gambling. Tribal leaders and organizations, including the California Nations Indian Gaming Association (CNIGA), have been vocal in their support, asserting that illegal online platforms not only undermine this framework but also pose risks to consumers. Tribal gaming generates nearly $25 billion for California’s communities and supports over 112,000 jobs across the state.

Despite the support for the bill, there is notable opposition from some sweepstakes operators and smaller tribes such as the Kletsel Dehe Wintun Nation, Sherwood Valley Band of Pomo Indians, and the Mechoopoda Indian Tribe of Chico Rancheria. They argue that AB 831 disproportionately favors larger tribal casinos and may limit essential revenue streams for smaller tribes, putting their economic futures at risk.

The Social Gaming Leadership Alliance (SGLA) has also criticized the legislation, warning that its enactment could devastate a billion-dollar industry and harm consumers and technological progress within the sector. They have urged Governor Newsom to veto the bill.

AB 831 aims to close loopholes exploited by sweepstakes operators who claim their platforms do not qualify as gambling since they are characterized as promotional games. If the bill is signed into law, it will restrict access to popular online sweepstakes casino platforms in California, which offer redeemable prizes to users.

It is important to note that AB 831 does not legalize sports betting or online casinos; instead, it reinforces existing prohibitions against unregulated gambling while exempting licensed tribal casinos and genuine marketing sweepstakes. This is a continuation of a trend in California’s legislative approach to gaming; for example, Assembly Bill 549, signed by Governor Newsom in September 2024, allows tribes to take legal action against private cardrooms that are suspected of violating exclusivity rules.

While proponents claim that banning sweepstakes casinos would provide better consumer protection, some state officials have raised concerns that it could drive Californians toward unregulated gambling options on offshore websites, which could expose them to even greater risks. Governor Newsom has not publicly commented on his position regarding AB 831 as of now, and the Assembly is expected to concur with the Senate’s amendments before the bill can be presented for his approval.

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