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Analysis · Sweepstakes

AB 831, California's sweepstakes casino ban, and what it does to operators, payment processors and affiliates

AB 831, Chapter 623 of 2025, added Penal Code section 337o. Since 1 January 2026 it is a misdemeanor to offer an online dual-currency sweepstakes game in California, and to knowingly support one as a payment processor, geolocation provider, content supplier, platform or media affiliate. Stake.us and Pulsz exclude California in their terms; Chumba and McLuck keep it for free-play only.

Published 2026-10-13By the CryptoGuardz Register Desk6 min read16 sources

Photo: Josh Hild / Unsplash

AB 831 bans dual-currency sweepstakes casinos in California. The Governor signed it on 11 October 2025 as Chapter 623, and the new Penal Code section 337o took effect on 1 January 2026. Offering an online sweepstakes game in the state is a misdemeanor punishable by a fine of $1,000 to $25,000, up to one year in county jail, or both. The same section reaches payment processors, geolocation providers, game suppliers, platforms and media affiliates that knowingly support one.

Everything below comes from the chaptered text and bill history (official leginfo pages, cross-checked on LegiScan), the codified section, and each operator's own terms, all read on 13 October 2026. It is not legal advice.

What does AB 831 actually do?

Two things. Section 3 of the bill adds a new crime, Penal Code section 337o. Section 2 rewrites the unfair-practices list in Business and Professions Code section 17539.1, so a dual-currency sweepstakes is also a prohibited practice under consumer law. The bill passed the Assembly 77 to 0, the Senate 36 to 0, and the Assembly concurred in Senate amendments 79 to 0 on 12 September 2025.

The core prohibition is one sentence:

(a) It is unlawful for any person or entity to operate, conduct, or offer an online sweepstakes game in this state.

California Penal Code section 337o(a), added by Stats. 2025, Ch. 623, Sec. 3

What counts as an online sweepstakes game?

All four conditions in section 337o(c)(3) have to be met. The game is available online or on a phone or computer, it "utilizes a dual-currency system of payment", it simulates gambling, and it "awards cash or cash equivalents". The simulated-gambling list is spelled out: slot machines, video poker, table games including blackjack, roulette, craps and poker, lotteries, bingo and sports wagering.

Two hands holding a smartphone and typing on it — Illustration: a phone in use. AB 831 covers games offered online or on a phone or computer, one of the four conditions this section lists. Photo: freestocks / Unsplash

The two currencies are defined by what they do, not by what an operator calls them. "Direct consideration" is a coin or token "that may be purchased by a player or received through a bonus or promotion" and is used to play. "Indirect consideration" is a coin or token "that may be exchanged for a prize, award, cash, or cash equivalents". The statute adds that indirect consideration "is provided for free through a promotion, bonus, or with the purchase of a related product". That is the Gold Coin and Sweeps Coin model described in its own words, and the free-with-purchase step that the industry relies on to remove consideration is written into the definition.

The cut-off line sits in the rewritten section 17539.1(a)(12):

This paragraph does not make a game that does not award cash prizes or cash equivalents unlawful.

California Business and Professions Code section 17539.1(a)(12), as amended by AB 831

A pure social casino with no cash prize is outside the ban. Section 337o(f) also exempts occasional retail promotions "incidental to substantial bona fide sales of consumer products or services", and section 337o(e) leaves gambling enterprises licensed under the Gambling Control Act and the California State Lottery alone.

Who else does AB 831 cover besides operators?

Seven named categories of business. Subsection (b) is the part that matters to anyone in the supply chain:

(b) It is unlawful for any entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to knowingly and willfully support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.

California Penal Code section 337o(b)

"Media affiliate" and "promotion" put affiliate marketing that targets California inside the statute. The mental element is "knowingly and willfully", and section 1 of the bill narrows it further. The Legislature's stated intent is to reach those who "knowingly and intentionally engage in, promote, or facilitate online sweepstakes games that utilize a dual-currency system", and not "ancillary or publicly available services, platforms, or infrastructure providers that may be unknowingly or unintentionally used". A geolocation vendor that sells a blocking service is in a different position from one that sells a pass-through.

The text names operators and suppliers. It does not name players as offenders. What a California player's account balance is worth after an operator exits is set by that operator's terms, not by the statute.

What are the penalties under AB 831?

A misdemeanor, per violation:

(d) A person who violates this section is guilty of a misdemeanor and shall be punishable by a fine not less than one thousand dollars ($1,000) nor more than twenty-five thousand dollars ($25,000), or by imprisonment in the county jail not exceeding one year, or by both the fine and imprisonment.

California Penal Code section 337o(d)

Section 3 of Chapter 623 adds the section. The bill has no urgency clause, so it took effect on 1 January 2026, the date ZwillGen and Frankfurt Kurnit Klein & Selz also give; nothing applied before that date. Breaching section 17539.1 is a separate consumer-law exposure; the remedies for it are set elsewhere in the Business and Professions Code and were not read for this piece.

Are sweepstakes casinos legal in California now?

Not in the dual-currency, cash-prize form. Section 337o has been in force since 1 January 2026, and the operators' own documents now reflect it in different ways. Some list California as an excluded state outright. Others keep California players on free-play coins and switch off the sweepstakes side. The table records only what each operator's own page said on 13 October 2026.

Operator	California status in its own terms	Document	Retrieved
Stake.us	Excluded territory, clause 2.1(b)(xix)	T&C v18.0, dated 10/07/2026	13 Oct 2026
Chumba Casino (VGW)	Standard play allowed, promotional play excluded	T&C v27.1, 16 Sep 2026	13 Oct 2026
McLuck	Not a prohibited territory; promotional contests stopped	Terms of Service v2.6, 15 Jul 2026	13 Oct 2026
Pulsz	Restricted territory, clause 3.4	Terms of Use v5.2, 1 Sep 2026	13 Oct 2026
Crown Coins	Not verified: terms page did not load as text	Terms of Service	not verified
WOW Vegas	Not verified: terms page did not load as text	Terms and Conditions	not verified

Chumba's terms say only players in the United States "EXCLUDING THE STATES OF CALIFORNIA" and 15 other states are eligible to enter the sweepstakes, while its narrower "Excluded Territory" list of six states does not include California. McLuck's terms put it in one line:

WE NO LONGER OFFER PROMOTIONAL CONTESTS IN CALIFORNIA.

McLuck Terms of Service, retrieved 2026-10-13

Pulsz clause 3.4 lists California among 14 restricted states. The Crown Coins and WOW Vegas terms pages did not return readable text on 13 October 2026, so their California position is not verified here. Stake.us lists California as number xix of 22 excluded states, in terms dated "10/07/2026" with no stated date format; the per-state picture for that operator is in Stake.us sweepstakes by state and the litigation in the Stake.us lawsuit filings.

The Chumba and McLuck approach maps onto the statute's own carve-out: a game that awards no cash prize is not covered. Whether a given free-play build in California really has no path to a cash prize is a product question the terms cannot answer.

What AB 831 does not cover

Prediction markets are a different fight. AB 831 is written around a dual-currency payment system and simulated casino games. Kalshi and Polymarket run on CFTC designation and federal preemption arguments, covered in Is Kalshi gambling? and Is Polymarket legal in the US?. Daily fantasy and pick'em apps are not dual-currency sweepstakes either; see Is PrizePicks gambling?.

How California prosecutors have used section 337o since January was not checked here. No charging document or court ruling under it was read. The wider state-by-state picture is in Are sweepstakes casinos gambling?, on the sweepstakes register and on the California page of the US state guide.

Quick answers

What is AB 831?

A 2025 California law, Chapter 623, that added Penal Code section 337o. Since 1 January 2026 it bans online dual-currency sweepstakes games that simulate gambling and award cash. Details are on the California page.

When did the California sweepstakes ban take effect?

On 1 January 2026. AB 831 has no urgency clause, and the Governor signed it on 11 October 2025.

What is the penalty for running a sweepstakes casino in California?

A misdemeanor: a fine of $1,000 to $25,000, up to 1 year in county jail, or both, under section 337o(d).

Does AB 831 apply to affiliates and payment processors?

Yes, if they act "knowingly and willfully". Section 337o(b) names 7 categories, including payment processors, geolocation providers and media affiliates. More on the sweepstakes register.

Where can I get help with gambling in the US?

The National Problem Gambling Helpline is 1-800-MY-RESET (1-800-697-3738), with call, text and chat. More options are on the responsible gambling page.

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Sources

About this piece

Compiled by the CryptoGuardz register team from the sources listed above. Research and drafting are AI-assisted and reviewed by a named editor before publication. Nothing here is a recommendation to gamble. If a figure or a reading is wrong, tell us and the correction is logged in public.