On Saturday, California Gov. Gavin Newsom announced that he had signed legislation to ban sweepstakes gambling platforms. Beginning on Jan. 1, 2026, sweepstakes casinos and sportsbooks will be outlawed across California.
The legislation, Assembly Bill No. 831, makes online sweepstakes versions of casino games that use virtual currencies illegal within California.
That means sweepstakes gambling brands like Stake, Chumba Casino, LuckyLand Slots, Pulsz, Fliff Sportsbook, Cheddr, and Fortune Coins can’t operate in California. It remains to be seen how these companies and others like them will comply with the new law.
What are Online Sweepstake Casinos?
The typical sweepstakes casino model features two distinct types of virtual currency. The currencies are used to play casino games or those that mimic or simulate gambling.
According to California, this dual-currency model circumvents state gambling law.
The first virtual currency is gold coins (GCs), which are used in so-called “free-to-play games” and have no cash redemption value. The second is sweepstakes coins (SCs), which may be awarded as a “bonus” with the purchase of gold coins, through promotional activities, or as complimentary rewards.
Players can use sweepstake coins to participate in sweepstakes entries, which are potentially redeemable for real-world prizes or cash.
The sweepstakes model could allow gamblers to circumvent terms and conditions with certain lenders. One former sweepstakes player claimed in a 2025 lawsuit that Affirm gave him predatory loans for gambling.
Growing Sweepstakes Crackdown
The California sweepstakes ban was extraordinarily popular among officials. No lawmaker voted against the bill during the legislative process, which began in February 2025. Within California, Los Angeles has sued sweepstakes leader Stake for alleged illegal gambling.
In addition to California, states that enacted laws in 2025 to address the issue of sweepstakes casinos include New Jersey, Montana, Nevada, and Connecticut.
The state of Washington already had a ban on sweepstakes casinos.
States such as Arizona, Louisiana, Maryland, Michigan, Mississippi, and New York have sent cease-and-desist orders against the sweepstakes casino industry.
New York and Ohio have also considered legislation similar to the California ban.
Why Sweepstakes Casinos are Dangerous
Any form of online gambling can be highly addictive for users. While they may operate in different ways, sweepstakes casinos and sportsbooks can cause harm to users just like a traditional online casino or sportsbook.
The vast majority of online gamblers lose, and sweepstakes casinos usually have few safeguards to protect users from over-leveraging themselves.
In fact, some sweepstakes casinos send users to the wrong addiction support groups. That’s because these casinos claim they aren’t gambling, so betting addiction risks don’t apply.
Furthermore, states have said that sweepstakes casinos lack proper age checks to prevent minors from gambling. Nor is there enforceable self-exclusion for these platforms.
Sweepstakes casinos have used celebrities like Ryan Seacrest and Brian Christopher to promote their products and convey a friendly, sanitized version of their brand to consumers.
Penalties Under CA Sweepstakes Ban
The California law targets the operators of sweepstakes casinos.
A person who violates the sweepstakes casino ban could be convicted of a misdemeanor. Consequences for violating the new ban include a fine of up to $25,000 and/or imprisonment for up to a year.
Supporting the sweepstakes casino industry could also get you in trouble in California.
The bill makes it unlawful for any financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to “knowingly and willfully support directly or indirectly” sweepstakes casino gambling.
California Ban Hits Sweepstakes Casino Market
Sweepstakes casinos have been around for years, but their use has surged in recent years.
Online gambling has become increasingly normalized in the U.S. following a 2018 U.S. Supreme Court ruling that granted states the authority to regulate online sports gambling.
Many sweepstakes casinos offer versions of sports betting, including moneylines, spreads, and player props.
According to research by Eilers & Krejcik Gaming, the sweepstakes casino industry had yearly revenue growth of 89% between 2019 and 2022. Researchers reported the U.S. sweepstakes casino market to be worth $3.1 billion in 2022, with California being among the largest state-level markets for the games.
California Sweepstakes Casino Ban FAQ
Are Sweepstakes Illegal in California?
Sweepstakes casinos and sportsbooks are illegal in California as of Jan. 1, 2025. However, sweepstakes contests are still legal in California, provided they adhere to certain rules.
They’re legal if they follow consumer-protection rules and avoid being an illegal lottery or casino.
Sweepstakes contests must offer a truly free, equal-chance way for people to enter.
Is California banning online casino gambling?
The California sweepstakes casino ban was an update to existing California law that already banned online casino-style gambling.
Online gambling in California is banned. That said, California allows online horse-race betting statewide via licensed ADW (Advance Deposit Wagering) operators.
Daily fantasy sports (DFS) gambling is also available in California, but the legality of those platforms was still being debated as of 2025. California doesn’t regulate DFS and the state attorney general has called DFS illegal.
California does not sell lottery tickets online or through any app, and lottery courier/reseller services aren’t permitted. You must buy tickets in person from authorized retailers.
Can I gamble online if I live in California?
No, you cannot gamble online if you live in California. The exceptions include online horse betting, DFS platforms, and federally regulated “prediction” gambling sites.
If you are a California resident and travel to a state with regulated online sports betting, casino, or lottery gambling, you can gamble online in that jurisdiction.
U.S. online gambling laws pertain to the state’s borders. You can gamble online outside of California even if you’re a California resident. But if you’re in California, you can’t legally.
California casinos have challenged the legality of prediction sportsbooks like Kalshi and Polymarket. Critics say those platforms are illegal gambling sites like sweepstakes casinos.
Why is DraftKings banned in California?
DraftKings Sportsbook isn’t specifically banned in California, but online sports betting is illegal, so DraftKings does not operate in the state.
DraftKings has lobbied for the legalization of sports betting in California, but efforts have so far been unsuccessful.
Under the DFS gambling model, DraftKings does offer online betting in California through the company’s DraftKings Fantasy app.
Did California ban PrizePicks?
No, the California sweepstakes casino ban did not affect PrizePicks, which is a daily fantasy sports gambling platform. PrizePicks doesn’t operate with the sweepstakes model.
However, the legality of DFS in California was still an open debate as of 2025.
What’s Next After California Sweepstakes Casino Ban?
There are hundreds if not thousands of sweepstakes casinos in the world. It’s unclear how many offer California products.
To avoid criminal exposure, many sweepstakes casinos will stop offering gambling to people within California.
However, some sweepstakes casinos may continue to operate in violation of California law. This is especially true for offshore casino sites.
Others may tweak their business model and move to so-called “social casino gambling.” This model is similar to the sweepstakes format and can also cause harm and addiction to users.
The NFL Super Bowl Slots app is an example of a social casino product. Users can buy a virtual currency to engage in simulated slot gambling. However, the in-app currency can never be redeemed for anything of value.
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