California’s sweeping new gambling law is sending shockwaves through the U.S. sweepstakes casino industry. With Assembly Bill 831 (AB 831) officially signed by Governor Gavin Newsom on October 11, 2025, the state has become the first major U.S. jurisdiction to ban dual-currency sweepstakes casinos, dealing a blow to operators like VGW (Chumba Casino, LuckyLand Slots) and Pace-O-Matic. The ban takes effect January 1, 2026.
The bill, introduced by Assemblymember James Ramos (D-Highland), passed both chambers unanimously — 63-0 in the Assembly and 40-0 in the Senate. It prohibits any online platform from offering casino-style games where players use virtual currencies (such as “Gold Coins” and “Sweeps Coins”) that can later be redeemed for cash or prizes. Lawmakers argued that these systems exploit a legal gray area and mimic gambling without proper licensing or consumer protections.
The move comes amid mounting pressure from California’s tribal gaming operators, who contend that sweepstakes sites siphon players away from their regulated casinos and violate tribal exclusivity compacts. “This isn’t innovation — it’s imitation,” said one tribal gaming executive, applauding the legislation.
Major suppliers have already begun withdrawing. Playtech stopped providing slot content to sweepstakes operators in California in September 2025, while Pragmatic Play exited the broader U.S. sweepstakes market. Analysts estimate that AB 831 could impact an estimated $500 million in annual play volume from California users alone, forcing companies like VGW, Skillz, and Stake.us to pivot toward regulated social gaming or international markets.
Supporters say the law closes a loophole that let operators offer casino-like experiences outside the state’s licensing framework. Critics, however, argue that a blanket ban could push casual players toward offshore gambling sites that operate with no safeguards or responsible-gaming tools.
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The question now is whether other states will follow California’s lead. Regulators in Florida, Texas, and New York are reportedly reviewing similar bills. If even one of those states enacts parallel measures, the current sweepstakes model — long marketed as “entertainment, not gambling” — may become commercially unviable across most of the U.S. As enforcement gears up in 2026, the sweepstakes casino era in America may be entering its final spin. For now, operators face the same reality as players: you can’t keep betting on a loophole forever.
