Published in cooperation between PRInfinimedia and the Gilroy Dispatch
California lawmakers face mounting opposition to Assembly Bill 831, legislation that would ban sweepstakes-style casinos operating with dual-currency models throughout the state. The measure has advanced through multiple committees despite growing resistance from tribal nations and industry groups questioning both its scope and development process.
Assemblymember Avelino Valencia introduced the bill to address tribal gaming compact timelines, but legislators substantially amended it in June to target sweepstakes platforms that use Gold Coins and Sweeps Coins to circumvent traditional gambling regulations. The Assembly approved the measure, which subsequently passed three Senate committees including Governmental Organization and Public Safety.
On Aug. 29, the Senate Appropriations Committee voted 7-0 to advance AB 831 during a Suspense Day hearing, moving it to the Senate’s Third Reading file. The full Senate must vote by Sept. 12, after which the bill would return to the Assembly before reaching Governor Newsom’s desk by the Oct. 12 deadline.
Initially, most of California’s more than 100 federally recognized tribes supported the legislation. Tribal leaders saw unregulated sweepstakes operators as unfair competitors that hurt their gaming income and existing agreements. These platforms avoid the rules that govern tribal casinos while competing for their customers.
Licensed online casinos offer something sweepstakes sites cannot guarantee: reliable payouts. Players can now play and cash out with ease at legitimate sites that process withdrawals quickly using proven payment methods. Most of these casinos complete transactions the same day.
However, tribal unity on AB 831 has fractured. The Kletsel Dehe Wintun Nation became the first tribe to oppose the legislation, potentially influenced by its business partnership with sweepstakes operator VGW. The Big Lagoon Rancheria subsequently joined the opposition, despite being a 17-member tribe without casino operations.
Big Lagoon Rancheria Chair Virgil Moorehead criticized how lawmakers handled the bill, stating they changed it too much from what it was supposed to address and failed to consult properly with tribal governments. Moorehead believes the measure puts tribal sovereignty at risk and worries its sweeping language might create legal problems for various businesses in the sweepstakes ecosystem, from tech companies to financial services to marketing firms.
Industry organizations mobilized against the legislation following the tribal opposition. The Social and Promotional Games Association, representing sweepstakes operators, condemned AB 831 as rushed and flawed while aligning with dissenting tribes. VGW has pushed back by arguing for oversight and taxes instead of shutting down the industry entirely.
The company has made financial threats about what a ban might cost. VGW claims over 1,000 workers would lose employment. The firm also contends the state could miss out on substantial tax revenue, potentially hundreds of millions annually with some projections reaching into the billions.
Legal challenges add complexity to the regulatory battle. High 5 Entertainment recently lost an important court case in San Francisco when a judge decided not to move a customer dispute into private arbitration. The court found the company’s user agreements were unfair to customers.
This means the customer can take High 5 to regular court instead of handling the dispute privately. Other sweepstakes companies are watching this case closely. Some attorneys think what happens here could affect future lawsuits and change how different states handle these businesses.
The Sept. 12 Senate vote deadline creates urgency for lawmakers as various stakeholders continue lobbying efforts. What happens here will probably shape how other states handle digital sweepstakes gaming and could determine the future balance between tribal gaming interests and new digital entertainment platforms.
Sweepstakes gaming operations have flourished by exploiting regulatory gaps in gambling law. Companies such as VGW and High 5 Entertainment draw players through casino-style games that circumvent traditional gambling definitions. Players purchase virtual coins for gameplay, then receive separate “sweeps coins” that can yield actual monetary prizes. This dual-currency system permits operation in jurisdictions where conventional online casinos face prohibition.
