Governor Newsom Signs Sweepstakes Ban into California Legislation
The signature has finally come following weeks of speculation.
California Governor Gavin Newsom has signed a bill to make sweepstakes casinos illegal. The bill will become effective on Jan. 1, 2026, after passing both houses of the California legislature with no recorded opposition.
The bill bans sites that use a dual-currency system to offer sweepstakes-based games, which often imitate real-money online casinos that offer games such as slots and roulette, and provide real-world prizes. The California Nations Indian Gaming Association (CNIGA) supported the bill, saying these sites infringe on tribal gaming exclusivity rights protected under state law.
California is now the most populous state in the U.S. to enact such a ban, joining a growing list of states taking action against sweepstakes-style online gambling. This represents a big shift in regulatory pressure for the industry. By comparison, New York, the next-largest state currently considering a similar ban, has about half the population.
The Social Gaming Leadership Alliance (SGLA) had urged Governor Newsom to veto the bill, arguing it would negatively impact digital innovation and economic opportunities. In a statement, SGLA Executive Director Jeff Duncan expressed concern that the law would eliminate a pastime enjoyed by Californians and could cost the economy $1 billion.
Despite these objections, the bill will take effect in early 2026, banning sweepstakes casino operations and reinforcing California’s current stance on regulated gaming.
New York awaits the Governor's decision
While California finalizes its crackdown on sweepstakes casinos, New York lawmakers are still waiting for Governor Kathy Hochul’s decision on a similar bill passed over three months ago.
Senate Bill S5935, sponsored by Senator Joe Addabbo, had strong bipartisan support, passing 57–2 in the Senate and going through the Assembly soon after.
The bill targets dual-currency online games that simulate casino, lottery, or New York sports betting experiences while offering cash prizes. It also includes enforcement provisions that give the New York State Gaming Commission, the state police, and the Attorney General's office the power to enforce.
Although Hochul has until the end of the year to sign the bill into law, she has yet to decide. Addabbo has publicly expressed hope that neighboring New Jersey’s recent enactment of its own sweepstakes ban would influence New York’s leadership to act.
In the interim, New York Attorney General Letitia James' office has already issued cease-and-desist orders to 26 platforms operating in the state, some of which voluntarily exited the market.
Addabbo said the bill doesn't target legitimate sweepstakes run by retailers or hospitality businesses, but is aimed at operators using sweepstakes structures to mimic unlicensed gambling.
Despite pushing for the ban, Addabbo continues to advocate for broader legalization and regulation of online gaming in New York, arguing that a regulated market would offer safer products and better consumer protection while reducing illegal activity.
