California Assembly Bill 831 is a new state law that bans online sweepstakes casinos: websites and apps that let players use a dual-currency system to gamble on slots, poker, blackjack, and similar games for cash prizes. Signed into law and taking effect January 1, 2026, AB 831 makes operating or knowingly supporting these games a misdemeanor punishable by fines of $1,000 to $25,000 per violation and up to one year in county jail.1LegiScan. California Assembly Bill 831 – Gambling: Operation of a Contest or Sweepstakes
What the Law Bans
AB 831 targets a narrow category it calls an “online sweepstakes game.” A game only falls under the ban if it meets all four of these conditions at once:1LegiScan. California Assembly Bill 831 – Gambling: Operation of a Contest or Sweepstakes
- It is available online or through a mobile phone, computer, or similar device.
- It uses two in-game currencies: one bought with real money, and a second received for free through promotions or bonuses that can be exchanged for cash or prizes.
- It simulates casino-style gambling, including slots, video poker, table games like blackjack or roulette, lotteries, bingo, or sports wagering.
- It awards actual money or something convertible to money.
All four elements must be present. A game that simulates slots but never pays out cash does not qualify. A promotional contest that awards gift cards but does not use a dual-currency system also falls outside the definition.
How the Dual-Currency Loophole Worked
The business model AB 831 is written to shut down has become common online. A player visits a sweepstakes casino site and buys virtual “gold coins” for real money. Those coins technically have no cash value and are used to play casino-style games just for fun. Bundled with every gold coin purchase, though, the player also receives a second currency, often called “sweeps coins,” which can be used to play the same games for real cash prizes.
Operators have argued this structure sits outside gambling law because the sweeps coins are technically free, so no one is directly buying a chance to win. California legislators disagreed. AB 831 treats the bundled free currency as “indirect consideration” and defines a “related product, service, or activity” to include the purchasable currency itself. Buying gold coins that come packaged with free sweeps coins now counts as paying to gamble.1LegiScan. California Assembly Bill 831 – Gambling: Operation of a Contest or Sweepstakes
Who Can Be Charged
AB 831 reaches beyond the companies running the games. It is unlawful for any person or entity to operate, run, or promote an online sweepstakes game in California. It is also unlawful for financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates to knowingly support the operation or promotion of these games in the state.2California Legislative Information. AB 831 Gambling: Operation of a Contest or Sweepstakes
The bill carves out bystanders. The Legislature stated that AB 831 applies to those who knowingly and intentionally engage in, promote, or facilitate these games, and is not meant to reach ancillary or publicly available services, platforms, or infrastructure providers that may be unknowingly or unintentionally used in connection with a sweepstakes operation, so long as they are not acting with intent to further the games.2California Legislative Information. AB 831 Gambling: Operation of a Contest or Sweepstakes
A general-purpose cloud hosting company would not face liability simply because a sweepstakes operator used its servers. A payment processor that knowingly kept handling transactions for a sweepstakes casino after learning the nature of the business would be in a different position. The “knowingly and willfully” standard draws the line.
What Stays Legal
AB 831 does not touch licensed gambling or ordinary promotional contests. Two categories are exempt:1LegiScan. California Assembly Bill 831 – Gambling: Operation of a Contest or Sweepstakes
- Games and methods used by a gambling enterprise licensed under the Gambling Control Act, and operations of the California State Lottery. Tribal casinos, licensed card rooms, and the lottery continue to operate under their existing rules.
- Sweepstakes run by for-profit commercial entities on a limited and occasional basis as an advertising and marketing tool, provided they are incidental to substantial bona fide sales of consumer products or services and are not intended to create an ongoing gambling operation. Games that do not award cash or cash equivalents are also excluded.
Most everyday business promotions sit in the second exemption. A restaurant chain running a seasonal contest where customers can win free meals, a retailer offering a prize drawing with purchase, or a beverage company putting game codes on bottle caps all fall outside the ban. The distinguishing feature is that a legitimate promotion supports actual product sales. A sweepstakes casino sells virtual coins as the product and uses the sweepstakes itself as the draw.
Penalties
Violating AB 831 is a misdemeanor under the new Penal Code Section 337o. Each violation carries a fine between $1,000 and $25,000, up to one year in county jail, or both.1LegiScan. California Assembly Bill 831 – Gambling: Operation of a Contest or Sweepstakes Those numbers are substantially higher than California’s general gambling misdemeanor, which caps at $1,000 and six months.3California Legislative Information. California Penal Code 330 Penalties apply equally to operators and to the supporting entities who knowingly facilitate the games, and because each violation is a separate offense, an operator serving thousands of California players faces significant cumulative exposure.
What It Means if You Play on These Sites
AB 831’s criminal prohibition is aimed at operators and the businesses that knowingly support them, not at individual players placing bets. Players are not themselves charged under the new section. Once the law takes effect on January 1, 2026, though, any sweepstakes casino that keeps serving California users is doing so illegally. Depositing money with an operator that is violating California law creates obvious risk around getting those funds back if the platform is shut down or its payment channels are cut off.
Use of sweepstakes casinos before January 1, 2026 is not retroactively affected; the law applies to conduct after its effective date. Compliant operators are likely to stop accepting California players at that point, and anyone with an existing account should plan for that transition.