California’s Push to Ban Sweepstakes Casinos and DFS

California lawmakers have set the stage for one of the most significant shifts in online gaming regulation. The state Senate unanimously approved Assembly Bill 831 (AB 831), a measure that would effectively ban sweepstakes casinos and daily fantasy sports operators.

The 36-0 vote has everyone from tribal leaders to sweepstakes companies and even everyday players buzzing.

While the bill still needs a final nod from the Assembly before heading to Governor Gavin Newsom’s desk, the momentum is undeniable. The Golden State, home to nearly 40 million people, could soon become the largest market in the US to outlaw these types of gaming platforms.

What Exactly Is AB 831?

AB 831 is what’s known as a “gut-and-amend” bill. Originally tied to a different subject, it was reworked late in the legislative process to address sweepstakes gaming. The bill targets dual-currency, prize-awarding sweepstakes operators that resemble casino gambling or sports betting.

In plain terms, it targets social casinos that allow players to use virtual “coins” for entertainment, then switch to another type of currency that can be redeemed for real-world prizes. Lawmakers argue these models blur the line between harmless games and unregulated gambling.

Importantly, recent amendments protect players from penalties and carve out exceptions for promotional sweepstakes run by companies like McDonald’s or Starbucks. State lottery products and traditional advertising contests remain untouched.

Tribal Community Split Over the Ban

The tribal community in California is split right down the middle. The California Nations Indian Gaming Association (CNIGA) and major tribes such as the San Manuel Band of Mission Indians have supported AB 831, calling it a step toward protecting tribal exclusivity in gaming.

On the flip side, four smaller tribes have spoken out strongly against the bill. The Kletsel Dehe Wintun Nation, Sherwood Valley Rancheria of Pomo Indians, Mechoopda Indian Tribe of Chico Rancheria, and Big Lagoon Rancheria all staged protests outside the state capitol. Their argument is straightforward: sweepstakes partnerships represent one of the few economic opportunities available to tribes that lack large casinos or favorable locations.

“For communities long overlooked and geographically isolated, digital commerce is not a luxury — it is a lifeline,” said Eric Wright of the Kletsel Dehe Wintun Nation. “AB 831 would sever that lifeline.”

Industry Pushback and Economic Arguments

Unsurprisingly, social casino operators and their allies are not taking this quietly. The Social Gaming Leadership Alliance (SGLA) and the Social and Promotional Games Association (SPGA) have led the opposition, claiming the bill is both rushed and deeply flawed.

SGLA Executive Director Jeff Duncan argued that California lawmakers should be looking at regulation, not prohibition. According to Duncan, properly structured rules could create new revenue streams while still protecting players. He also warned that the bill threatens to cut off economic opportunities for smaller tribes and legitimate businesses.

Some operators have even released tax projections to bolster their case. Publishers Clearing House, now owned by a social gaming company, testified that regulation could produce as much as $149 million annually for California. A separate study suggested the state could see $2.4 billion in sweepstakes-related sales in 2025 alone.

Suppliers Already Feeling the Ripple Effect

The fight over AB 831 isn’t just hitting operators — it’s trickling down to the companies that power these games, too. After Los Angeles city attorney Hydee Feldstein Soto filed a lawsuit against Stake.us, some of the biggest names in gaming content started backing away.

Evolution, Pragmatic Play, and Hacksaw Gaming have already pulled their titles, with Pragmatic Play going a step further by announcing it won’t work with sweepstakes operators anywhere in the US moving forward.

Others are taking a cautious approach. Playtech, for example, isn’t directly tied to the lawsuit but has decided to keep its distance from California just in case. That makes sense when you consider the language in AB 831. It doesn’t just target the operators themselves — it also puts payment processors, platform providers, and even affiliate marketers on the hook if they knowingly support sweepstakes gaming.

The DFS Twist

One wrinkle in AB 831 that has gotten less attention is its impact on daily fantasy sports and social sportsbooks. The bill includes language that would outlaw DFS operators in California, aligning with Attorney General Rob Bonta’s opinion that DFS violates state law.

Governor Newsom previously expressed skepticism about banning fantasy contests, calling them different from gambling. Still, unless changes are made, popular DFS apps could be swept up in the same ban aimed at sweepstakes casinos. For sports fans in California, that would be a massive change.

What Happens Next?

The clock is ticking. The Assembly has until September 12 to concur with the amended language before the session ends. If it clears that hurdle, Governor Newsom has until October 12 to sign or veto the bill.

If signed, California would join New Jersey, which passed a similar ban this summer, and potentially New York, where a bill awaits Governor Kathy Hochul’s decision. With California’s size and influence, such a move could set the tone for how other states treat sweepstakes gaming in the years ahead.

Why This Matters Beyond California

The outcome of AB 831 goes far beyond state lines. California is not only the nation’s most populous state but also a trendsetter in gaming regulation. A ban here would send shockwaves through the entire sweepstakes and DFS industry.

Players who enjoy social casinos could find their favorite apps shut down or severely restricted. Tribes, especially smaller ones, may lose a potential revenue source at a time when economic diversification is badly needed.

Meanwhile, regulators in other states will be watching closely to see if California’s path becomes the blueprint.