California Makes Progress On Bill To End Sweepstakes Casinos

No one seems to know where California stands on legal betting. Some think that since they’re so liberal, they just allow anything and everything.

Others know sports betting in California is illegal, thus they think other kinds of betting are too. That is wrong since California allows daily fantasy sports and casino betting, the latter run via local Native American tribes only.

That’s what makes its current predicament with sweepstakes casinos so weird. Are they legal? Are they not? Well, no one is entirely sure.

You see, sweepstakes casinos mimic real online casinos — slots, blackjack, and all — but skirt gambling laws with a clever loophole. Instead of betting cash directly, players buy virtual currency bundled with entries into sweepstakes for cash prizes. Operators claim this keeps them legal in California, but critics say it’s just gambling under another name and without all the regulation that comes with it.

As of now, sweepstakes casinos like Fliff, Stake, and others work perfectly fine in the Golden State. But… there’s a new piece of legislation in California that wants to nip that in the butt. Keep on reading, and we’ll tell you what’s going on in the Golden State!

California Readies War Against Sweepstake Casinos

California lawmakers have come out swinging against sweepstakes casinos. Earlier this July, they made progress on AB 831 — the bill aimed at banning these operators across all of the Golden State. It cleared the Senate Governmental Organization Committee already so there’s some momentum.

Though, that progress was thanks to some maneuvering. That’s because AB 831 wasn’t originally written to target sweepstakes casinos (it was about tribal betting instead). The Assembly passed it back in May with completely unrelated language. But once the bill hit the Senate, someone slipped in the sweepstakes ban last month. A total pivot, yes, but hey, that’s politics (just look at One Big Beautiful Bill).

Regardless, the bill is moving forward. California’s legislative session runs through September 12, though any bill can be carried into 2026 if needed. The next stop for AB 831? The Senate Public Safety Committee in mid-July.

“We cannot look the other way while these platforms exploit legal grey areas,” Assemblymember Avelino Valencia said in a statement. “These operations undermine the voter-approved framework that affirms Tribal governments’ sovereign right to conduct gaming in California. AB 831 strengthens that framework and ensures gaming in California remains fair and accountable.”

Funny enough, the bill made mention of some famous California residents — Ryan Seacrest and Drake. That’s because both have endorsed the very sweepstakes casinos California is trying to ban. Drake is a big promotional partner for Stake, while Seacrest shills Chumba Casino.

Even though the bill cleared the first committee, lawmakers didn’t let it slide without some pushback. Several raised concerns about the potential legal consequences this kind of ban might trigger — especially given how the language was dropped into a tribal gambling bill that had nothing to do with sweepstakes in the first place.

That last part might become a sticking point. Lawmakers, no matter what you think of them, usually don’t like making rushed decisions on policy. This late-second language revision is exactly that so that’s something to look out for as the bill now progresses.

States And Sweepstakes Casinos In Tug Of War

This isn’t just California’s problem either. Other states are heating up on sweepstakes casinos too. New York betting already made its move by sending a cease and desist letter to over 20 of these operators AND pushing legislation that would ban anyone from running, promoting, or even processing payments for these casino-like platforms. If it sticks, it’s a blueprint for more states to follow.

Naturally, the sweepstakes industry isn’t letting that slide. Two lobbying groups — the Social and Promotional Games Association (SPGA) and the Social Gaming Leadership Alliance (SGLA) — are pushing back hard. As they should be, after all, they’re racking up hundreds of millions of dollars, without paying as stiff taxes as regulated gambling companies.

Their argument? The classic “this isn’t gambling, it’s gaming.” They’re also leaning into the rewards program industry as a whole. Like why is Starbucks allowed to run rewards points or Marriott with their hotel programs, but sweepstakes casinos aren’t? That question is why lawmakers can’t easily ban these things. If they do, non-gambling companies might also bear the loss.

Then there’s the black market warning. Both groups claim banning sweepstakes won’t kill demand, it’ll just send players to popular offshore sportsbooks where there’s zero oversight and zero tax kickback (sweepstakes casinos, at the very least, pay an income tax).

All this is to say this tug-of-war is only getting started. California’s decision has national importance, not just local. Hate ’em or love ’em, the state sets trends in the United States, and really, the world. Other states will be keeping close tabs on what happens in California.

We’ll be monitoring the situation closely, including how the bill performs with other committees. So make sure you’re checking back with us to get the latest updates from us.

Eric Uribe

Eric is a man of many passions, but chief among them are sports, business, and creative expressions. He's combined these three to cover the world of betting at MyTopSportsbooks in the only way he can. Eric is a resident expert in the business of betting. That's why you'll see Eric report on legalization efforts, gambling revenues, innovation, and the move...

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