Overview of AB 831

In what could prove to be a key development for sweepstakes operators and related entities, the California Legislature recently passed Assembly Bill No. 831 (“AB 831”), with the California Assembly issuing its final approval on September 12, 2025. The bill now awaits the decision of Governor Gavin Newsom to either sign the bill into law or veto it. If enacted, AB 831 would become effective on January 1, 2026, and will impose a statewide ban on online sweepstakes casinos.    

If the Governor signs AB 831 it will unquestionably impact a wide range of stakeholders, including but not limited to, operators and the multitude of companies that support sweepstakes products. One of the key provisions of AB 831 is the expansion of criminal liability, not just to operators of games deemed illegal but also to entities that support online sweepstakes games, such as financial institutions, payment processors, gaming content suppliers, marketing affiliates, geolocation providers, and platform providers.

Penalties and Exemptions Under AB 831

Violations of AB 831 could result in significant penalties, including fines and potential legal action against non-compliant entities. AB 831 makes it a misdemeanor to operate or knowingly support online sweepstakes games, with penalties ranging from a minimum $1,000 fine to a maximum $25,000 fine, up to one year of county jail, or both. The statute does not specify whether these penalties apply per occurrence or per violation. Under language added near the end of the legislative process, AB 831 does include exemptions for the operation of otherwise lawful games by licensed gambling enterprises and for the use of sweepstakes as legitimate marketing tools, seeking to ensure that regulated gambling activities and traditional sweepstakes offered to promote the sale of consumer goods and services remain unaffected. But the language of the bill is broad and will undoubtedly be subject to numerous efforts to interpret and apply its actual scope.

Opposition to AB 831 & Related Developments

AB 831 has already faced opposition from various stakeholders, including sweepstakes casino operators and tribal entities, who argue, in part, that the proposed bill would infringe on their operational rights and economic interests. 

There have been several recent high-profile developments in the online sweepstakes space and the introduction of AB 831 in California is the latest in the trend by states to regulate or otherwise control sweepstakes style gaming products. Connecticut, Montana, and New Jersey also introduced similar legislation this year. If AB 831 is signed by the Governor, it will prompt market participants to reconsider their approach to operations within the space.