California Gov Signs Sweeping Sweepstakes Gambling Ban

California Governor Gavin Newsom signed A.B. 831 into law, which will ban sweepstakes operators, as well as their payment processors and media affiliates, from conducting business in the Golden State.

California Legislature Says No to Sweepstakes

The end was nigh for sweepstakes operators when the California Senate and the State Assembly both unanimously voted to ban sweepstakes in the state. Governor Gavin Newsom simply hammered the final nail in the coffin when he signed the bill into law over the weekend.

The law is a sweeping rebuke of sweepstakes operators and any entity attempting to facilitate a dual-currency sweepstakes contest from entering California’s borders. The law, as written, will prohibit any “financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate…”

Jeff Duncan, the executive director of the Social Gaming Leadership Alliance (SGLA), knew the writing was on the wall after one legislative hearing in which he commented, “Today’s hearing exposed the committee’s complete disregard for facts, economic reality, and the voices of tens of thousands of Californians, all to hand monopoly power to tribes that have already invested hundreds of millions of dollars in Las Vegas and California coastal properties.”

California’s gaming tribes make billions of dollars in casino revenue, which they control exclusively in the state, and any entity, like sweepstakes operators, that is impinging on their gambling monopoly is vigorously challenged. Thus, it wasn’t a surprise that the biggest gaming tribes aligned with California legislators to support the recent legislation banning sweepstakes and their facilitators.

Tribal Support Is Critical

Native American tribes in the state fiercely defend their exclusive gaming rights, as demonstrated by their investment of hundreds of millions in a 2022 campaign to prevent mobile sports betting companies such as FanDuel and DraftKings from operating within the state.

When the dust settled, 80% of California voters rejected Prop 27, which would have allowed statewide mobile sports betting.

DraftKings CEO Jason Robins and FanDuel President Christian Genetski appeared alongside tribal leaders in a panel titled “The Power of Partnerships” earlier this year. The mobile sportsbook powerhouses are desperately trying to make amends and come to a resolution that will satisfy the tribes enough to allow these mobile sports betting operators to partner with them in the nation’s largest state.

However, the California Nations Indian Gaming Association (CNIGA) is treading cautiously and deliberately. Following that meeting, CNIGA released a statement saying, “Let there be no false illusion: establishing an acceptable framework and governance model will take time.”

Although the sweepstakes operators would have welcomed tribal support, only the smaller, non-gaming tribes seemed inclined to support them, assuming they would get a cut of the proceeds. However, it was not enough to tip the scales in their favor.

A.B. 831 goes into effect on January 1, 2026, and after that, anyone in violation of the law will be subject to a fine of up to $25,000 or up to a year in county jail, or both.