California Lawmakers Revise Sweepstakes Gambling Ban for Second Time

Latest Legislative Changes

The bill cleared its final committee on August 29 after earlier Assembly approval. Lawmakers made additional revisions on September 3 during the third reading phase.

The latest amendments clarify that retail promotions from companies like Starbucks or McDonald’s remain legal. The bill now states these provisions “do not make unlawful game promotions or sweepstakes conducted by for-profit commercial entities on a limited and occasional basis.”

Key Exemptions and Protections

The legislation will not affect the California State Lottery or licensed operators under the Gambling Control Act. Lawmakers replaced “gambling-themed games” with “gambling” for clearer terminology.

A new Section 1 specifies the law applies only to those who “knowingly and intentionally” promote dual-currency sweepstakes. Payment processors, banks, and geolocation companies receive liability protection if unaware of their involvement.

Suppliers, platforms, and affiliates face penalties only for “knowing and willful” actions. Previous amendments ensure individual players cannot be criminalized.

Industry Support and Opposition

The Yuhaaviatam of San Manuel Nation and major gaming tribes strongly support the measure. The California Nations Indian Gaming Association (CNIGA) also backs the legislation.

Opposition comes from smaller tribes, including the Kletsel Dehe Wintun Nation and Sherwood Valley Band of Pomo Indians. These groups warn the ban could harm tribes exploring digital gaming opportunities.

Publishers Clearing House and the California Cities Gaming Authority representing cardrooms oppose AB 831. Critics argue the ban increases economic inequality and restricts tribal gaming autonomy.

Understanding Sweepstakes Casinos

Sweepstakes casinos operate in legally ambiguous territory. These platforms offer cash-redeemable prizes while presenting themselves as promotional contests rather than gambling sites. They typically use dual-currency systems where players purchase virtual coins and receive sweepstakes entries.

National Regulatory Trend

Multiple states have banned sweepstakes operations. New York, Connecticut, Montana, Nevada, and New Jersey enacted formal prohibitions. Washington, Michigan, and Idaho maintain existing restrictions.

Delaware, Louisiana, West Virginia, and Maryland forced operators out through cease-and-desist actions. Massachusetts considers similar legislation with House Bill 4431.

The regulatory crackdown reflects growing concern over these platforms’ gambling-like features and player protection issues.

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Read the full bill: California Assembly Bill 831