California Governor Gavin Newsom has signed a new law that outlaws sweepstakes casinos, creating a dramatic shift in the online gambling market.
Assembly Bill 831 was signed shortly before the October 11th deadline after passing the California Legislature with a unanimous vote.
The law specifically targets dual-currency sweepstakes platforms that imitate sports betting and real-money casinos. On January 1st, 2026, the prohibition will become operative.
Although states like Connecticut, Montana, and New Jersey have already implemented similar bans, California, the most populous US state, represents the largest market that has not yet done so.
California’s legislative opposition to sweepstakes gambling was unanimous, demonstrating the broad support for regulating these unregulated sites.
Industry Reactions and Nationwide Enforcement
Los Angeles City Attorney Hydee Feldstein Soto filed a lawsuit against sweepstakes operator Stake.us before the statewide law was passed, claiming the website was functioning as an unlawful gambling operation.
Many withdrew from the California market shortly after the lawsuit was filed because it also targeted streaming service Kick and related suppliers.
As evidenced by the recent exodus, regulators have said that cutting off their supplier networks is the primary weapon against such operations.
Over the past 12 months, authorities have stepped up efforts to crack down on sweepstakes casinos across the United States.
In order to provide gambling products outside of stringent gambling regulations, the platforms frequently used digital ‘gold coins’ and ‘sweeps coins’, which are non-monetary currencies that can be exchanged for real-money prizes.
As more states pursue bans and enforcement, industry estimates for 2025 have been lowered in response to the actions of California, New York, Louisiana, Arizona, Michigan, and other states. Experts predict further revenue declines in 2026.
Numerous state and federal regulators have now sent more than 100 cease-and-desist letters to sweepstakes operators, completing a comprehensive effort to stop the proliferation of unregulated online gambling in the US.
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