California’s Anti-Sweepstakes Bill Clears Senate Public Safety Committee

Targeting Online Sweepstakes

Sponsored by Assemblymember Avelino Valencia, AB 831 seeks to outlaw online sweepstakes platforms that use dual-currency systems, where players swap cash for virtual items to win prizes.

Supporters, including California’s tribal groups like the California Nations Indian Gaming Association, argue it closes a legal loophole exploited by digital casinos.

The bill doubles jail time from six months to a year and raises fines from $1,000 to $25,000, a 2500% jump, for operators, payment processors, and influencers.

Valencia claims it won’t affect legal promotions like Starbucks’ “Starbucks for Life” or California Lottery’s “2nd Chance” programs, as it targets games with cash-equivalent prizes.

Critics Warn of Overreach

Opposition from groups like ACLU California Action, the Social & Promotional Games Association (SPGA), and the Association of National Advertisers, including Google and NBCUniversal, highlight the bill’s vague wording.

They fear it could accidentally criminalize legitimate contests, with SPGA calling it “too vague, too rushed, and too risky.” Jeff Duncan of the Social Gaming Leadership Alliance said, “This rushed proposal… threatens to criminalize the businesses that drive California’s economy.”

Critics also slam the bill’s “gut-and-amend” process, which inserted the sweepstakes ban into an unrelated tribal gaming bill, dodging thorough debate. Senator Rosilicie Ochoa Bogh noted, “This is what happens when we don’t go through the proper process.”

After passing the Assembly in May and the Senate Governmental Organization Committee on July 8, AB 831 now awaits review by the Appropriations Committee. It faces a September 12, 2025, deadline for passage, or it may carry over to 2026.