AB 831 Clears Committee as Concerns Overreach Remain

California is once again drawing a line in the sand when it comes to online gambling models. Assembly Bill 831 just took another step forward after clearing the State Senate’s Public Safety Committee with a 6-0 vote. The bill now moves to the Appropriations Committee for further review.

Good to know

• AB 831 targets online sweepstakes platforms using dual currency models.
• Offenders could face up to one year in jail and $25,000 in fines.
• Players would not face penalties under the current version of the bill.

AB 831 focuses on online sweepstakes casinos that let users play games with virtual currencies that can be cashed out. Lawmakers say these platforms operate in a gray zone by offering “no purchase necessary” entry while still mimicking real-money gambling.

Assemblymember Avelino Valencia, who introduced the bill, explained, “To be clear, players are able to convert these winnings to actual cash, and that’s the issue.”

The bill would make it a misdemeanor to operate such platforms, targeting entities that knowingly provide support, including payment processors and backend service providers.

To avoid sweeping up the wrong targets, the committee adopted amendments. Valencia emphasized that those changes shield vendors who are not knowingly involved and protect consumers who play on these platforms. Promotions, media partners, and financial institutions would only be liable if they were knowingly supporting the operations. Valencia said.

“Things like payment processors, financial institutions, geolocation providers, media affiliates and also individuals would not be held liable if this bill were to pass. This is solely going to focus on the entities that are providing these sweepstakes-types of platforms.”

He also mentioned ongoing conversations with California card rooms to make sure they are not unintentionally affected.

Tribal support and gaming policy

The bill has strong backing from tribal groups including the Yuhaaviatam of San Manuel Nation, the California Nations Indian Gaming Association (CNIGA), and the Tribal Alliance of Sovereign Indian Nations (TASIN).

Their argument centers on the exclusivity granted to tribal gaming under California law. According to the San Manuel Nation:

“The state’s voters have consistently shown their trust in Native American tribes to operate gaming facilities responsibly and ethically. Allowing unregulated and predatory sweepstakes operators to bypass these regulations undermines that trust.”

Industry pushback

At the same time, a growing list of organizations has lined up against AB 831. The Social and Promotional Games Association (SPGA) is leading the opposition and has teamed up with groups like the ACLU and the Association of National Advertisers.

Their concern is that the bill’s language could be too broad, possibly outlawing lawful promotional sweepstakes and marketing programs.

“The SPGA is proud to stand alongside the ACLU, the Association of National Advertisers, and other partners in voicing concerns about AB 831,” an SPGA spokesperson said. “The bill, as written, could have unintended consequences for lawful promotional practices without offering clear consumer protections.”

Opponents are urging lawmakers to revisit the bill’s wording to make sure legitimate business practices are not impacted.

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