California sweepstakes casinos face ban under AB 831 bill

All eyes are on California this week as its controversial anti-sweepstakes invoice heads right into a second legislative listening to on Tuesday (July 15) earlier than the Senate Public Security Committee. Often called AB 831, the invoice would ban on-line sweepstakes casinos and slap prison penalties on operators, suppliers, promoters and even media associates.

The proposal has sparked a heated debate with teams just like the Social and Promotional Video games Affiliation (SPGA) arguing it could stifle “innovation,” whereas some tribal leaders worry it could harm communities which have already confronted historic challenges.

BACKROOM BAN: CALIFORNIA’S GUT-AND-AMEND MOVE RISKS JOBS, INVESTMENT, AND CONSUMER CHOICE pic.twitter.com/i5ewk3jEhi

— theSPGA (@theSPGA) June 23, 2025

California remains to be one in all 10 states that haven’t legalized sports activities betting. On the identical time, each day fantasy sports activities have been operating on-line within the state for over a decade. Sweepstakes casinos, nonetheless, have develop into a headache for regulators throughout the nation. Whereas tax considerations are a part of the difficulty, the larger problem is how troublesome these platforms are to manage.

In June, AB 831 was rewritten from the ground up by Meeting member Avelino Valencia with help from the California Nations Indian Gaming Affiliation. The up to date model is designed to shut each loophole and take away sweepstakes casinos from the state utterly.

NEW: The California anti-sweepstakes invoice will get its 2nd legislative listening to on July fifteenth at 9 am PT earlier than the Senate Public Security Committee. AB 831 would ban on-line sweepstakes casinos and impose prison penalties on operators, suppliers, promoters and media associates. pic.twitter.com/N5G7aTzDbK

— Daniel Wallach (@WALLACHLEGAL) July 11, 2025

Right here’s what it is advisable learn about AB 831 and the way it might impression sweepstakes casinos in California.

Is sweepstakes authorized in California?

Sure, sweepstakes are usually authorized in California so long as they comply with sure guidelines. Entry should be free and based mostly purely on probability, with no buy or fee required to enter or declare a prize. The state additionally has strict transparency and shopper safety necessities. Firms have to obviously disclose the principles, who’s eligible, and the percentages of successful.

However California Legal professional Common Rob Bonta isn’t a fan of how some platforms have been working. He just lately released a scathing opinion about them, saying all these video games have typically been used to rip-off customers.

In a 33-page doc printed earlier this month, Bonta criticized draft and decide ’em-style each day fantasy contests. He argued they cross a line “as a result of they contain betting on sporting occasions.”

On the State of California Division of Justice web site, Bonta had already warned: “1000’s of firms use sweepstakes playing cards, letters, and calls—or the promise that you’ve got gained a prize—to entice customers to ship cash, surrender their private data, or take heed to a persuasive gross sales pitch. Usually, customers give the corporate their private data, time, or cash, solely to get nothing again in any respect.”

The SGLA urged lawmakers to reject AB831 throughout as we speak’s California Senate Governmental Group Committee listening to on the invoice. Why?

AB831 would:
❌ Ban on-line social video games that provide authorized “freemium plus sweepstakes” choices
❌ Override longstanding authorized precedents that… pic.twitter.com/lXnE5rxcKT

— Social Gaming Management Alliance (SGLA) (@SGLeadership) July 8, 2025

DraftKings and Underdog are among the many firms pushing again. Underdog has stated it’s going to maintain providing fantasy sports activities in California and even tried to block Bonta’s opinion from being released. That effort didn’t work and a California state choose dominated the opinion doesn’t change present state legislation and allowed it to be printed.

Jeff Duncan, the Social Gaming Management Alliance (SGLA)’s government director and former Congressman, stated: “This invoice isn’t about defending gamers. It’s about defending incumbents from competitors.”

The SGLA has now launched a dedicated website. To date, the location exhibits 21,577 actions taken, together with writing, calling, and posting to X, previously referred to as Twitter, all geared toward native lawmakers.

What every week. Sweepstakes playing will nonetheless die an unpleasant loss of life. That’s not up for debate. As for DFS, I see this as a possibility to redefine the trade on our phrases.

— Victor Rocha (@VictorRocha1) July 4, 2025

On his webcast “New Regular,” Victor Rocha, convention chair of the Indian Gaming Affiliation, stated it’s “solely a matter of time earlier than the controversial twin foreign money type of gaming is eradicated.”

How do I discover official sweepstakes?

Bonta has some recommendation for recognizing official sweepstakes and avoiding scams.

For one, don’t pay to enter a sweepstakes or for the prospect to win a prize. Actual sweepstakes are free and based mostly on probability. It’s unlawful for firms to make you purchase one thing, pay a charge, or do something to extend your odds of successful. They need to provide you with a technique to enter with out spending cash, although that data is usually buried within the high quality print.

Additionally, by no means pay to say a prize. In the event you get a shock discover saying you’ve gained, be cautious. Reputable prizes don’t require you to cowl “taxes,” delivery charges, or another costs.

Keep away from calling 1-900 or 900 numbers to enter sweepstakes or accumulate prizes. These “pay-per-call” numbers can rack up big costs and are a typical entice.

Watch out for those who’re requested to name a quantity, attend a webinar, or be part of an occasion to study extra a couple of sweepstakes or prizes as that is typically a tactic to get you to take heed to a gross sales pitch for an overpriced product, a trial supply, or perhaps a donation.

Don’t hand over your private data like your cellphone quantity, house handle, or e mail. Coming into a shady sweepstakes might lead to a flood of telemarketing calls, spam, and spam as a result of your particulars may be bought to different firms.

Be careful for impressive-sounding names, official-sounding titles, and prizes that appear too good to be true. Scammers typically depend on these tips to look credible and lure individuals into handing over their cash or data.

It’s additionally price realizing the principles about raffles. In the event you’re paying for an opportunity to win, that’s a raffle, not a sweepstakes. In California, raffles are solely authorized if run by a charitable group registered with the Legal professional Common’s Workplace, and a minimum of 90 p.c of the cash raised should go to charity. You may test if a raffle is registered by looking the Legal professional Common’s Registry of Charities and Fundraisers.

In the event you assume you’ve come throughout a rip-off, you may report it on to the California Legal professional Common’s Workplace.

What states require sweepstakes registration?

In america, solely Florida, New York, and Rhode Island require sweepstakes registration beneath sure situations. In Florida and New York, this is applicable if the overall retail worth of all prizes is greater than $5,000. While in Rhode Island, the brink is $500, however it solely applies to retail retailer promotions. In some instances, bonding can be required.

In each different state, sweepstakes and contests comply with normal promotion legal guidelines with none additional state-specific necessities.

Just like California, many states make it clear that winners can’t be requested to pay or purchase one thing with a purpose to declare their prize. For promotions tied to alcoholic drinks, there are additionally guidelines in place.

In states like Alabama, Arizona, Indiana, and Vermont, sweepstakes can not require individuals to go to a licensed location to enter, and all such promotions should be open to residents throughout your complete state.

As for tobacco-related promotions, these are utterly banned in Massachusetts, Michigan, and Virginia.

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