Proposed legislation would criminalize routine business services across tech, finance and media sectors
WASHINGTON, DC – California Assembly Bill 831 (AB831) proposes a sweeping ban on online social games which utilize sweepstakes promotions. If enacted, the bill would not only deny millions of Californians access to the safe, free-to-play games they enjoy and close off a potential revenue stream for the state, but it would also expose a wide range of legitimate businesses to unprecedented criminal liability.
Backed by gambling interests seeking to eliminate perceived competition, AB831 was introduced through a last-minute “gut-and-amend” maneuver near the end of the legislative session, subverting proper process and allowing for little discussion, debate or consideration of potential unintended consequences.
One of the most concerning aspects of AB831 is its overly broad language, which could criminalize routine services provided by technology companies, financial institutions and media platforms. The California Senate Public Safety Committee’s own report into the bill warns that the overly broad provisions risk turning everyday business operations – such as payment processing, marketing services, advertising and platform hosting – into criminal offenses.
The criminal code language in subsection (b) of AB831 states: “It is unlawful for any person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.”
This sweeping language raises several red flags:
- Impractical Monitoring Requirements. Service providers would be forced to act as de facto law enforcement, monitoring clients’ promotional activities – an unrealistic and burdensome expectation.
- Unfair Criminal Liability. Businesses could face fines up to $25,000 and up to one year in jail – even if they had no knowledge of or control over a client’s activities.
- Lack of Clear Standards. The bill fails to define key terms, offer safe harbor provisions or establish reasonable compliance expectations, leaving businesses vulnerable to arbitrary enforcement.
“This rushed proposal not only cuts Californians off from the free-to-play games they enjoy and a potential revenue stream for the state, but it also threatens to criminalize the businesses that drive California’s economy,” said Social Gaming Leadership Alliance (SGLA) Executive Director and former Congressman Jeff Duncan. “We urge California lawmakers to take California businesses out of the crosshairs by making AB831 a two-year bill, allowing for a more thoughtful, consultative and collaborative process.”
In addition to the social gaming industry, opponents of AB831 include ACLU California Action, American Transaction Processors Coalition, Association of National Advertisers and Californians United for a Responsible Budget.
“A blanket prohibition on online sweepstakes would have far-reaching and unintended consequences – stifling innovation, undermining lawful business models, and reducing customer access,” wrote H. West Richards, Executive Director of the American Transaction Processors Coalition (ATPC) in a letter opposing Assembly Bill 831 that was submitted to a Senate committee. He continued, “A more balanced regulatory approach would allow responsible operators to function under clear rules, protecting consumers while preserving market integrity.”
SGLA remains committed to working with California lawmakers, regulators and stakeholders to craft policies that protect consumers, preserve player choice and support innovation, without placing undue legal risk on legitimate businesses.
To learn more about SGLA, please visit our website at www.SGLeadership.org and our social channels at LinkedIn, X, Facebook and BlueSky.
Contact:
Laurie Rossbach
Partner, Seven Letter
202.258.7810
Laurie@SevenLetter.com
About the Social Gaming Leadership Alliance
The Social Gaming Leadership Alliance (SGLA) champions social gaming operators who offer innovative, free-to-play entertainment experiences enjoyed by millions of Americans while promoting responsible digital entertainment. Our partners set the standard for innovation, world class games and the responsible use of digital marketing including sweepstakes promotions. We advocate for appropriate oversight that recognizes the unique entertainment value of social online games, protects players, platforms and the community, and promotes responsible gameplay.
The SGLA’s operator partners are VGW, PLAYSTUDIOS, Yellow Social Interactive, ARB Interactive and B-Two Operations, representing Chumba Casino, Luckyland Slots, Global Poker, Pulsz, Pulsz Bingo, Modo Casino, McLuck, HelloMillions and SpinBlitz. Other partners include major payments provider Nuvei. The SGLA’s advocacy and standards focus exclusively on online social games. Our advocacy does not extend to operators offering sports products or transacting in cryptocurrency.
