Sweepstakes Regulation Spotlight: New York Pushback and the AB 831 Fallout in California

The sweepstakes-casino business model is under growing regulatory pressure in the U.S. Two key developments this fall signal major shifts for operators and players.

Key Points

The Social Gaming Leadership Alliance (SGLA) has launched a grassroots campaign in New York urging Kathy Hochul to veto sweeping legislation targeting “dual-currency” online sweepstakes platforms.
AB 831 in California has passed the Senate unanimously and moves toward the Governor’s desk; the bill would criminalise operators of unregulated sweepstakes-casino models.
States are increasingly aligning on bans or heavy regulation of sweepstakes-casino operators — casting doubt on the model’s future in major U.S. markets.

What’s happening?

In New York, the SGLA announced a targeted effort to mobilise public input ahead of a potential veto by Governor Hochul. The legislation in question would ban online sweepstakes casino models that use a dual-currency system (such as “Gold Coins” plus “Sweeps Coins” redeemable for cash). SGLA argues regulation and taxation would be a better outcome than outright prohibition. Sources indicate the campaign logged over 2,000 direct actions by early November.

Meanwhile in California, AB 831 has cleared the Senate by a 36-0 margin and now awaits the Assembly’s concurrence and the Governor’s signature. The bill would penalise not only operators but payment processors, affiliate services and other back-end providers engaged in unregulated sweepstakes. Penalties include fines up to $25,000, county jail time, or both.

The dual-currency sweepstakes model has become common across “social casino” brands: players purchase or receive virtual “Gold Coins” for entertainment, and receive bonus “Sweeps Coins” which can be redeemed for real cash prizes if certain play-through requirements are met. Federal law exempts sweepstakes from traditional gambling restrictions only if no purchase is needed; states differ widely on whether that model still counts as regulated gambling.

Why it matters

These developments mark a turning point for the sweepstakes-casino sector:

Market access: California and New York account for substantial potential player pools. Restrictions in either state significantly shrink the addressable market for sweepstakes operators.

Operational risk: The expansion of liability to third-party services in California raises costs for affiliates and payment providers — many may disengage proactively to minimise legal exposure.

Regulatory momentum: Multiple states have either issued cease-and-desist letters to operators or adopted legislation that targets sweepstakes casinos. The model’s “grey-area” status is increasingly being challenged.

Player impact: If bans are signed into law, players in affected states may find their favourite platforms blocked or require urgent action to redeem balances before exit.

Industry direction: Operators must now evaluate whether to pivot toward fully regulated gaming (with licensing, tax, compliance) or withdraw from states tightening enforcement.

What’s next?

A decision from Governor Hochul in New York remains key — a veto could preserve the status quo, while a signature would trigger market exits.

In California, the Assembly vote and sign-off by Governor Gavin Newsom will determine the effective date and enforcement timeline for AB 831. Sources suggest a ban could become effective as early as January 2026.

Other states may follow suit in the coming session. Operators should monitor legislative calendars in jurisdictions with active sweepstakes-casino lobbying and enforcement.

Players with balances in at-risk states should review redemption windows and terms of service for their platforms, and prepare for closure or migration.

Sweepstakes Regulation Spotlight — Timeline

Oct 2025

SGLA Campaign Launch — New York
The Social Gaming Leadership Alliance begins a grassroots push urging Governor Hochul to veto legislation banning dual-currency sweepstakes casinos. Over 2,000 public actions logged by early November.

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Nov 2025

AB 831 Clears California Senate
California Senate passes AB 831 unanimously (36–0), criminalising unregulated sweepstakes-casino operators and related services. Awaiting Assembly concurrence and Governor Newsom’s signature.

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Nov 2025

Industry Response
Sweepstakes operators begin preparing contingency plans, potential state exits, and legal reviews as both New York and California signal restrictive shifts.

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Dec 2025

Awaiting Governor Decisions
Governor Hochul’s decision could preserve or end sweepstakes operations in New York. Governor Newsom’s action on AB 831 will determine California enforcement timing.

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Jan 2026 (Projected)

Possible Enforcement Begins
If AB 831 is signed, enforcement could start as early as January 2026. Operators and affiliates face new liabilities; payment processors may suspend sweepstakes transactions.

Suggested Resources

Compliance line: No purchase necessary. Void where prohibited. Must be 18+ to play. Sweepstakes rules and state restrictions apply. Check terms at the official website before participating.