California Sweeps Industry Urges Newsom to Veto AB831
California’s sweepstakes industry has urged state Governor Gavin Newsom to veto a bill that would criminalize dual-currency online gaming.
Assembly Bill (AB) 831 was passed unanimously by state lawmakers in September and is now on Newsom’s desk. He has until Oct. 12 to sign, veto, or allow it to become law without action.
In a letter dated Sept. 25, the Social Gaming Leadership Alliance, which represents a coalition of top sweepstakes casino operators, warned that the bill was misguided and rushed, and urged Newsom to consider a tax-based alternative that could generate up to $300 million annually.
AB 831, sponsored by Assemblymember Avelino Valencia, would make it a misdemeanor to operate or support dual-currency sweepstakes platforms, which allow players to use both virtual and redeemable currencies. The law also targets supporting companies such as payment processors and affiliate marketers, though a late amendment excluded traditional promotional sweepstakes.
The measure has gained broad support from California’s tribal gaming lobby, including the California Nations Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nations. Supporters argue the bill protects consumers and tribal sovereignty.
With speculation swirling over Newsom’s potential presidential aspirations, political analysts suggest the governor’s decision may hinge not just on policy but on optics. What that means for the state’s sweepstakes industry remains to be seen.
Addabbo urges Hochul to sign ban
As California awaits Governor Newsom’s decision, New York faces its own crossroads with sweepstakes casinos. More than three months after the state legislature approved Senator Joe Addabbo’s sweepstakes ban, Gov. Kathy Hochul has yet to sign the bill into law.
Addabbo’s proposal, which overwhelmingly passed both chambers in June, would outlaw dual-currency games that mimic casino, lottery, or sports betting formats while offering real-world prizes. Like California’s bill, it targets operators and entities such as suppliers and payment processors.
In a recent interview, Addabbo expressed frustration at the delay.
“When the New Jersey governor signed their version of the sweepstakes ban, I sent that article to my contact in the governor’s office, saying, ‘Hey, just saying, Jersey’s governor signed it. How about it?’ But we’re waiting,” he told SBC Americas.
Hochul has until the end of the year to sign. In the meantime, enforcement has already begun. The New York Attorney General’s office issued cease-and-desist orders earlier this year, leading 26 platforms to exit the state.
Despite his support for the ban, Addabbo has stated that regulation, not prohibition, is the best long-term solution. He continues to push for a regulated iGaming framework that would bring legal clarity and revenue to New York while crowding out illegal operators.
With several states, including New Jersey, Connecticut, and Montana, already enacting sweepstakes bans, the pressure is mounting for Hochul to act. Whether California and New York ultimately pursue prohibition or regulation, the national future of the sweepstakes model hangs in the balance.
