California Senate committee advances bill to ban dual-currency sweepstakes

A California Senate committee on Tuesday unanimously approved a bill that would ban dual-currency sweepstakes games in the state, targeting online contests that resemble casino-style gambling and sports betting.

Assembly Bill 831, sponsored by Assemblymember Avelino Valencia (D-68), passed the Senate Public Safety Committee in a 6-0 vote and now heads to the Senate Appropriations Committee. The legislation seeks to make it illegal to operate or promote sweepstakes contests that allow users to purchase virtual currencies - often called “sweepstakes coins” - for a chance to win cash, prizes, or equivalents.

“These platforms are circumventing the will of the voters and sidestep the state’s gaming framework,” Valencia told the committee. “Players are able to convert these winnings to actual cash, and that's the issue.”

Under the bill, violators would face a misdemeanor offense, punishable by fines ranging from $1,000 to $25,000, up to one year in county jail, or both.

The bill is backed by several Native American gaming groups, including the California Nations Indian Gaming Association (CNIGA), the Yuhaaviatam of San Manuel Nation, and the Tribal Alliance of Sovereign Indian Nations (TASIN), who argue that dual-currency sweepstakes undermine California’s voter-approved tribal gaming exclusivity.

“Tribal gaming exclusivity, granted by the voters of California, must be honored,” the Yuhaaviatam of San Manuel Nation said in a written statement. “Allowing unregulated and predatory sweepstakes operators to bypass these regulations undermines the trust and integrity of California’s gaming policies.”

Johnny Hernandez, vice chairman of the San Manuel Band of Mission Indians, said the bill aims to protect vulnerable populations. Dual-currency sweepstakes exposes vulnerable and young Californians to real money gambling with no regulations, he stated.

The San Manuel Band operates Yaamava’ Resort and Casino, which offers traditional promotional sweepstakes, but not dual-currency games. “AB 831 does not make traditional and promotional sweepstakes unlawful,” Valencia noted. “It solely targets dual currency models that mimic gambling.”

Social gaming industry stakeholders and advocacy groups expressed concern over the bill’s breadth, warning that it could inadvertently criminalize legitimate promotional practices and stifle a lucrative sector of California’s digital economy.

“This is not an unregulated industry and it’s not operating in the shadows. It supports American jobs and American industry,” said David Jumper, chief marketing officer of ARB Interactive, a major U.S.-owned social casino firm.

Bill Gantz, speaking on behalf of the Social Gaming Leadership Alliance (SGLA), urged lawmakers to slow the legislative process. “California should regulate, not criminalize ... this established form of entertainment,” Gantz said. “If California regulated and taxed this industry... the state could collect at least $149 million of sales tax revenue a year.”

The Social and Promotional Games Association (SPGA), backed by groups such as the Association of National Advertisers and the California chapter of the ACLU, echoed those concerns in a statement this week, calling for a more “measured approach.”

“This diverse coalition, including civil liberties advocates, leading businesses, and industry groups, reflects a shared belief that the bill, as written, could have unintended consequences for lawful promotional practices without offering clear consumer protections,” a SPGA spokesperson said.

Valencia acknowledged concerns and said the legislation would be amended to ensure that card rooms and third-party service providers are not inadvertently swept into enforcement.