Online sweepstakes casinos and social sportsbook-style apps offering cash prizes are no longer permitted to operate in California. AB 831 took effect on January 1, 2026, a law that closes a gray-market betting channel that had operated outside California’s regulated gaming framework.
Introduced by assembly member Avelino Valencia, the bill advanced through the Legislature in 2025 after supporters of the bill argued that sweepstakes casinos used “no purchase necessary” mechanics and virtual currency models to offer casino-style games with real cash payouts while avoiding existing gambling laws.
Under the statute, operating or knowingly supporting a prohibited sweepstakes gambling platform is classified as a misdemeanor. The law applies to operators and a broad range of associated entities but does not impose penalties on individual users.
What AB 831 Does
AB 831 prohibits online games that replicate casino-style gambling through dual-currency or promotional sweepstakes models when those games result in cash or cash-equivalent prizes. The law specifically targets platforms that function similarly to online casinos or sports betting apps without state authorization.
The statute extends liability beyond game operators to include payment processors, platform providers, technology vendors, and content distributors that knowingly facilitate prohibited sweepstakes gambling activity. Traditional gambling operations that are already legal under California law, as well as legitimate marketing sweepstakes and promotions, are explicitly exempt.
Affected platforms were required to shut down California access or exit the market entirely. Violations of AB 831 may result in criminal penalties of up to $25,000 in fines and up to one year in jail per offense.
The law does not penalize players who previously used sweepstakes platforms. However, bettors in California no longer have access to sweepstakes-based casino or sports-style games that had served as alternatives to regulated online gambling options.
How This Inches California Toward Regulation
By eliminating sweepstakes casinos, AB 831 removes an unregulated alternative that existed in the absence of legal online sports betting and online casino gaming. The law reinforces California’s existing gaming framework by restricting gambling-style activity to authorized forms and regulated operators.
AB 831 narrows the gap between California’s gaming laws and enforcement while maintaining the state’s prohibition on online sports betting and online casinos, leaving any future expansion of legal wagering subject to separate legislative or voter approval.
