California Sweepstakes Ban Has Devastating Impact on Illegal Gaming Ops
Posted on: October 13, 2025, 07:43h.
Last updated on: October 13, 2025, 07:43h.
- Sweepstakes casinos have been banned in California
- Sweepstakes casinos allow players to win real money while gambling online
California Gov. Gavin Newsom (D) has signed a bill banning all forms of online sweepstakes promotions that allow a person to improve their odds of winning by making a financial transaction. Specifically, the statute signed by Newsom into law on Saturday makes it a crime for anyone or any business to facilitate online sweepstakes games that “utilize a dual-currency system.”
Sweepstakes casinos have rapidly emerged online in the US over the past few years. Market leaders like Stake and Chumba claim their online platforms offer free-to-play interactive social casino games. However, a secondary digital currency, often called sweeps coins, is available for purchase.
Sweeps coins, once they’re wagered a certain number of times, qualify to be “redeemed” (not “cashed out”) for money. Sweeps operators contend that since they provide social players with minuscule amounts of free sweeps coins, say, 10 cents for logging in two days in a row, their games are not unlike an online retailer offering a customer a daily free spin to win a discount code on their next purchase.
State attorneys general and lawmakers across the country believe the internet sweepstakes casinos are nothing more than businesses designed to dodge state gaming laws prohibiting iGaming.
Devastating Signature
California joins Connecticut, Delaware, Idaho, Michigan, Montana, and Washington in banning dual-currency online sweepstakes games. Ohio and Nevada have legislation pending.
Numerous other states have issued cease-and-desist orders against the prominent sweeps players. The impact on the unregulated online gaming industry is mammoth.
Eilers & Krejcik, a gaming consultant and market research firm that has promoted sweeps games after being tapped by the Social Gaming Leadership Alliance (SGLA), says online sweepstakes casinos are projected to generate 2025 gross gaming revenue of almost $4.7 billion. California is forecasted to be responsible for $790.5 million.
Gross gaming revenue is the amount of money kept by the operators after paying out winnings. Since sweeps casinos aren’t subjected to state tax because they aren’t regulated, they keep the entire haul.
California’s sweeps ban goes into effect Jan. 1, 2026. The overwhelming majority of California tries supported Newsom signing Assembly Bill 831. The SGLA was accused of bribing four tribes to back their opposition.
Voters, players who love online social games, California tribes, and online social games operators all made their position clear: they didn’t want a ban on this popular, safe form of entertainment,” claimed Jeff Duncan, SGLA executive director. “We hoped that Gov. Newsom would see past the anti-competitive efforts of the powerful, well-funded tribes behind this bill and veto AB 831, but he chose the easy, short-sighted path and turned his back on choice, innovation, and economic gains.”
With California estimated to account for 17% of the online sweepstakes market, Newsom’s signing of AB831 is a major blow for the unregulated online gaming operators.
Legal iGaming Limited
It’s only legal to gamble online for real money via slot machines and live dealer table games in seven states — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia.
Online sports betting is legal and operational in 33 states, plus Washington, DC. Missouri is set to join the internet sportsbook market on Dec. 1.
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