California votes to ban sweepstake games: Could its future lie in Europe?

In a landmark move with nationwide implications, the California State Assembly has unanimously passed bill AB 831, aiming to explicitly ban online casino sweepstakes operators within the state.

This decisive action signals a hardening stance against a business model that has long operated in a legal grey area and could redirect the industry’s focus to more welcoming jurisdictions.

The bill, authored by Assembly member Avelino Valencia, saw sweeping, bipartisan approval, passing the Assembly 63-0 after a similarly unanimous 36-0 vote in the Senate. All that remains is the signature of Governor Gavin Newsom, who has until mid-October to sign it into law, veto it, or let it become law without his signature.

The intent of AB 831 is clear: to target online sweepstakes casinos that use a legal argument to circumvent gambling laws.

These operators claim their model is a promotional sweepstakes, not gambling, because they provide free “Alternative Methods of Entry” (AMOEs), thus technically removing the element of “consideration” – a key pillar in the US legal definition of gambling.

However, California lawmakers and powerful tribal gaming interests argue that these platforms are de facto unlicensed gambling operations that mimic real-money casinos, siphon potential revenue from regulated tribal casinos, and lack consumer protections.

The ban represents a large blow to the nascent sweepstakes online poker industry, instantly cutting its addressable market by nearly a fifth. 

The economic ramifications are significant. The Social Gaming and Leadership Alliance (SGLA) expressed deep disappointment, warning that the bill would “eliminate more than $1 billion in direct and indirect economic activity in the state each year and deprive California of hundreds of millions of dollars in potential new revenue.”

The move is supported by a powerful coalition, including the state’s influential tribal casino operators and the Sports Betting Alliance, which represents major regulated operators like FanDuel, DraftKings, and BetMGM, who see sweepstakes sites as unlicensed competition.

As the door closes in California, the industry is actively seeking new frontiers.

This strategic pivot was underscored by the recent announcement from Pragmatic Play, which decided to leave the US social casino market. Notably, Pragmatic Play, which has a major office in Malta, is now raising the stakes with its new “industry-defining” Sweepstakes Platform announced earlier this month.

The question now is not just about the fate of sweepstakes in California, but where the industry will go next. It begs the question: could sophisticated sweepstakes platforms soon find a fertile market in Europe and other regulated regions, leveraging the island’s gaming expertise and regulatory framework?