Sweepstakes casinos: legal or not in California?
In California, the sweepstakes-casino model that simulates casino gambling with cash-equivalent prizes is explicitly prohibited to operate as of January 1, 2026, under AB 831.[1]
AB 831 added Penal Code section 337o, which makes it unlawful to operate, conduct, or offer an “online sweepstakes game” in the state. The statute also targets “knowing and willful” support by specified intermediaries (including payment processors and geolocation providers) and sets misdemeanor penalties, including fines and possible county jail time.[2]
What’s going on in California right now
The practical headline for 2026 is that AB 831 is now in effect, and the law squarely targets online, dual-currency sweepstakes games that simulate gambling. California has also kept a sharp tone around other online wagering-adjacent products.
- Daily fantasy scrutiny (July 2025): California’s Attorney General issued an opinion stating certain paid DFS formats (draft and pick’em style contests) constitute sports betting and are illegal under state law, while major operators signaled disagreement.[3]
- Sports betting still unresolved: Sports betting remains illegal in California; the most recent legalization attempt was on the 2022 ballot, and the issue was described as ineligible to return to the ballot until the 2026 midterms.
Gambling in California in 2026
California’s legal gambling options remain concentrated in established channels, with limited statewide authorization for online casino-style gambling. In practice, most casino-style play flows through in-person venues, while statewide offerings focus on specific categories.
- Tribal casinos: A major source of casino-style gaming.
- Cardrooms: A separate lane centered on poker and cardroom-style table play.
- California Lottery: A legal statewide product.
- Horse racing: Longstanding category, with advance deposit wagering in some contexts.
- Online expansion pressure points: Broad real-money iGaming is not authorized, and sports betting remains unsettled after 2022.
Why some online casinos block California players
California’s 2026 rules do not just focus on the operator. AB 831 also creates exposure for certain vendors and intermediaries when they knowingly support an online sweepstakes game, which pushes many platforms toward hard geoblocks and strict location controls.
- Inference: When payment, geolocation, or platform partners view California traffic as high-risk under the “knowing support” language, operators may lose the operational plumbing needed for purchases, redemptions, and verification, so blocking becomes the simplest path.
- Practical note: Location workarounds (like VPNs) commonly collide with identity and geolocation checks and can lead to denied redemptions or frozen accounts.
Sweepstakes winnings and taxes in California
Sweepstakes prizes can create taxable income, and later access changes do not automatically erase reporting obligations for prizes received earlier. Not tax advice.
- Save proof of redemption dates, prize values, and payout methods (cash, gift cards, or other).
- Keep any tax forms sent by a platform (for example, 1099-style forms if thresholds are met).
- Track smaller redemptions too, especially if prizes arrive in mixed formats.
- If the situation gets messy (multiple small prizes, non-cash items, partial redemptions), consider a tax professional rather than guessing.
Responsible play in California
If gambling-style play stops feeling fun, reaching out early can help. These resources can connect California residents and families with support.
- National Problem Gambling Helpline (and California listings): Call 1-800-522-4700, text 800GAM, or use chat options listed on the California resource page.[5]
- California Council on Problem Gambling: 951-394-9010.
- California Office of Problem Gambling treatment referral line: 1-800-GAMBLER.
- Gam-Anon (family support): 718-352-1671.