California Moves to Ban Online Sweepstakes Casinos

California lawmakers have introduced Assembly Bill 831, a proposal aimed at banning sweepstakes-style online casinos operating in the state. These platforms often use virtual currencies in a way that mimics traditional casino gambling, all while operating outside existing gambling laws. The bill’s goal is to close off legal grey areas that allow such models to continue unchecked.

Strong Support from Tribal Gaming Authorities

The legislation is backed by several major tribal gaming organizations, including the California Nations Indian Gaming Association (CNIGA), the Yuhaaviatam of San Manuel Nation, and the Tribal Alliance of Sovereign Indian Nations (TASIN). These groups maintain that sweepstakes casinos undermine the constitutional framework that grants tribal governments exclusive rights to operate casino gaming in California. They view the bill as a necessary step to preserve tribal sovereignty and the economic benefits associated with regulated tribal gaming.

Gut-and-Amend Tactic Speeds Up Process

Though the final wording of AB 831 hasn’t been released publicly, legal observers believe it was introduced using a “gut and amend” method. This process involves removing the contents of an existing bill and replacing it with new language, allowing lawmakers to accelerate the legislative timeline. It’s a controversial but common tactic that can fast-track changes through committee stages that have already been completed.

National Trend Toward Sweepstake Casino Bans

California’s move mirrors actions in other U.S. states. Montana and Connecticut have already passed legislation outlawing sweepstakes casinos, while New York’s bill awaits final approval. Meanwhile, states like Louisiana, Nevada, and Mississippi have issued cease-and-desist orders to operators believed to violate gambling laws.

This trend reflects growing concerns that sweepstakes casinos, although not officially recognized as gambling in some jurisdictions, function much like real-money online casinos, without regulatory oversight or consumer protection.

Industry Groups Push Back

Organizations representing sweepstakes casino operators are criticizing the California proposal. They argue that the bill was introduced without proper notice or public consultation and warn that the move could hinder digital innovation. Trade associations have also questioned the fairness of banning a business model that, in their view, complies with federal sweepstakes law.

The use of last-minute amendments has drawn particular criticism, with opponents claiming it limits meaningful discussion and avoids transparent policy-making.

Broader Impact on the U.S. Online Gaming Landscape

With California being the most populous U.S. state and home to a large share of online gaming traffic, any new law passed here could have nationwide implications. If AB 831 becomes law, it could set a precedent for more states to adopt similar bans, especially in jurisdictions where online gambling is either limited or not yet formally regulated.

Although the bill does not explicitly target fantasy sports and social casinos, the tightening of language around sweepstakes and affiliate marketing could increase scrutiny on related digital gaming platforms.

What’s Next?

California’s legislative session runs until September 12, giving lawmakers time to review and potentially amend the bill before it faces a vote. If passed, the bill could reshape how digital gaming is offered in the state and potentially influence how other states regulate the growing sweepstakes casino model.