California’s Assembly Bill 831 Targets Online Sweepstakes Operators
California has taken a decisive step against online sweepstakes gambling with a new law signed by Governor Gavin Newsom last weekend.
LISTEN TO THIS ARTICLE:The legislation aims to dismantle the business model and expose the wider network that supports it. Assembly Bill 831 – backed by the California Nations Indian Gaming Association and passed unanimously by the Legislature – targets not only operators but also payment processors, platform providers, affiliates and celebrity endorsers. The measure is slated to take effect on Jan. 1.
Tribal leaders and Indian gaming advocates say passing the law was only the first step. Senior figures from the industry and tribal communities are now urging the California Attorney General and local prosecutors to pursue enforcement actions under Assembly Bill 831 that would recover the profits operators have earned, a process often described as disgorgement. They argue that civil and criminal litigation is necessary to deter future schemes and to return money to consumers and the state.
Legal and industry figures who have followed the sweepstakes market say the strategy to go after the entire ecosystem represents an escalation. They point to coordinated political and advocacy work by tribal groups in California, allied suppliers and responsible-gaming advocates as the key driver of the bill’s rapid, unanimous passage. The law’s reach into payment rails and investor support is intended to make it financially risky for suppliers and services to continue supporting sweepstakes operations.
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What the Sweepstakes Ban Means Nationwide?
Industry sources say the California move has accelerated a broader withdrawal of sweepstakes casinos from U.S. markets. Since the campaign against sweepstakes was amplified at the Global Gaming Expo (G2E) last year, at least 17 states have adopted laws or taken actions that effectively render sweepstakes operations unlawful, while roughly half a dozen states have structures that make it difficult for those businesses to operate. Advocacy by attorneys general and state regulators has resulted in enforcement letters and cease-and-desist orders in jurisdictions including Michigan, Arizona and Massachusetts, prompting some major suppliers and operators to exit the space.
Observers warn that outlawing one product does not eliminate consumer demand for online gambling. Legal counsel and tribal representatives repeatedly urged regulators and lawmakers to consider expanding lawful access to online wagering as a longer-term solution. One industry estimate cited during recent briefings put annual online sports wagering activity linked to California at tens of billions of dollars, underscoring the scale of unmet demand that can be captured by unregulated operators or migrate to other unregulated products such as prediction markets.
Enforcement advocates stress two priorities: shutting down active operators and pursuing the money trail. Tribal leaders say recovering the funds operators took in is crucial, calling for proactive actions by Attorney General Rob Bonta and district attorneys across the state. Legal experts note that successful civil suits or regulatory actions against payment processors and back-end partners could create a chilling effect, discouraging service providers from enabling similar schemes in the future.
At the same time, legal commentators caution about the practical and technical challenges enforcement will face. Investigators must trace complex payment flows, parse contractual relationships with affiliates and platforms, and navigate jurisdictional limits when companies operate offshore. Some suppliers could reconfigure business models to evade new rules, while others may pivot to other emerging products that exploit regulatory gaps.
Tribal leaders and gaming industry veterans also framed the debate in terms of market allocation: they argue that online gaming revenue ultimately belongs to regulated operators – primarily tribal gaming enterprises under federal compacts – or to a system that provides legal alternatives for consumers. Without a regulated channel that meets demand, they warn, illicit operators will continue to innovate around enforcement efforts.
California’s legislation represents a notable test case that other states and federal actors will be watching closely. If state officials move from lawmaking to aggressive enforcement and successful recovery of profits, it could mark a broader turning point in how U.S. authorities respond to unregulated online gambling products. For now, the industry is watching to see whether promises of enforcement translate into courtroom actions and financial remedies that return money to victims and deter repeat offenders.
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