California bill targets online sweepstakes casinos, drawing tribal support

California lawmakers have introduced a bill to prohibit online sweepstakes casinos that use virtual currencies to mimic real-money gambling, joining a growing number of U.S. states taking aim at the controversial platforms. 

Assembly Bill 831, introduced by Assemblymember Avelino Valencia (D-Anaheim), seeks to outlaw internet-based sweepstakes that operate with a “dual currency” model, in which users purchase virtual coins to play casino-style games that can yield cash or prizes. Lawmakers argue such platforms function as unlicensed gambling businesses and circumvent California’s regulatory framework.

“We cannot look the other way while these platforms exploit legal grey areas,” Valencia said in a statement. “These operations undermine the voter-approved framework that affirms Tribal governments’ sovereign right to conduct gaming in California. AB 831 strengthens that framework and ensures gaming in California remains fair and accountable.”

The bill, co-sponsored by the Yuhaaviatam of San Manuel Nation and the California Nations Indian Gaming Association (CNIGA), is framed as a defense of tribal sovereignty and the integrity of California’s tribal-state gaming compacts.

“For over 25 years, Tribal governments like Yuhaaviatam of San Manuel Nation have upheld the will of California voters by operating gaming with integrity. Illegal online gaming now threatens this foundation - compromising voter-approved law and putting Californians at risk,” said Lynn Valbuena, chairwoman of the Yuhaaviatam Tribal Council of San Manuel.

Vice Chairman Johnny Hernandez, Jr. added: “We support this legislation that will close dangerous loopholes and strengthen the integrity of California’s gaming system. We remain committed to defending a proven framework that protects the sovereignty of Tribal Nations and delivers real and lasting benefits to all Californians.”

According to CNIGA, tribal government gaming contributes nearly $25 billion annually to California’s economy and supports over 112,000 jobs. “These illegal platforms erase the benefits of regulated gaming while exposing consumers to serious risks,” said CNIGA Chairman James Siva.

The bill also includes provisions to penalize individuals and entities that promote or facilitate illegal sweepstakes operations, potentially including celebrities and influencers. Howard Glaser, Global Head of Government Affairs at Light & Wonder, said the legislation could implicate high-profile figures like Drake, Paris Hilton, and Ryan Seacrest, who have promoted such platforms.

However, the proposal has sparked opposition from the Social and Promotional Games Association (SPGA), which criticized the bill as a “backroom ban executed through a controversial gut and amend maneuver.” A spokesperson for SPGA said there was no public debate, expert input, or economic analysis.

The group also warned that broadly worded provisions could unintentionally affect legitimate sweepstakes and promotional campaigns run by major brands like Marriott, Microsoft, and Starbucks.

AB 831 comes amid a broader national trend toward regulating or banning sweepstakes casinos. Since 2023, at least 16 states have taken enforcement actions, including New York, Connecticut, Montana, Nevada, Mississippi, and New Jersey. California’s move could signal a turning point, especially if other large states like Texas or Florida follow suit.

The bill is pending a hearing in the California Senate.