The Social and Promotional Games Association, a trade group for operators of online social and sweepstakes casinos, has sent a letter to California Assembly member Avelino Valencia regarding AB 831. The letter urges Valencia to vote against the bill and stresses that the legislation could have unintended consequences for businesses in California.
The letter does not ask Valencia to withdraw his substitute but rather to oppose it in the short term and open dialogue with Association members to create a regulatory system for sweepstakes gaming. Given Valencia’s testimony in support of the bill, it appears that the letter has not swayed him in that direction yet.
SPGA asks Valencia to oppose passage of AB 831
The Social and Promotional Games Association (SPGA) sent its letter to Valencia on June 30, expressing its members’ views on the legislation. Valencia became the bill’s sponsor on June 23 when he introduced a substitute for the bill. The letter reads:
“Dear Chair and Members,
On behalf of the members of the Social and Promotional Games Association (SPGA), we respectfully oppose the recent gut-and-amend of AB 831, which first went into print on June 24th.
Summary: AB 831 Is Too Vague, Too Rushed, and Too Risky
AB 831 seeks to outlaw an entire category of digital promotions and entertainment, which have existed and operated legally for many years, using language so broad that its full impact is impossible to predict. The bill was amended at the last minute, without stakeholder input, without supporting data, and without clear evidence of harm.
Before California creates new crimes, restricts speech, and disrupts legitimate businesses, the Legislature should take a more thoughtful and transparent approach and make this a 2-year bill. Disrupting an entire legal industry in less than two months without adequate debate, education, public outreach, and evidence supporting the proponent’s arguments seems extremely short-sighted and irresponsible.
AB 831 Relies on Vague and Circular Definitions
AB 831 criminalizes anyone who operates or supports a ‘sweepstakes game,’ but the bill fails to clearly define the terms it uses. It refers to a ‘dual currency system’ without ever explaining what that means. ‘Cash equivalents’ appears as a critical threshold but is left undefined. Meanwhile, the definitions of ‘direct’ and ‘indirect’ consideration are so broad and circular that nearly anything of value could qualify, even tokens or rewards given away for free. This puts everyday promotions, rewards apps, and marketing campaigns at legal risk. A detailed breakdown of the bill’s definition shortcomings is provided in Appendix A.
AB 831 Criminalizes Speech and Association
AB 831 makes it a crime to ‘support directly or indirectly’ a sweepstakes game. This could include software vendors, payment processors, advertisers, media platforms, and paid endorsers. The penalty: up to a $25,000 fine and a year in jail. This is not targeted regulation. It is a sweeping threat to lawful expression and commercial affiliation.
AB 831 Redefines Gambling Without Public Debate
AB 831 does not just target a narrow category of games. It effectively rewrites the definition of gambling in California. This shift would mark one of the largest expansions of state gambling law in decades, and it would happen without public input or legislative scrutiny. Gambling classifications carry serious implications for licensing, advertising, and enforcement. They should not be redefined through rushed legislation.
AB 831 Bans Safe, Legal, and Popular Entertainment
The products impacted by AB 831 are widely used, free to play, and protected by age gates, geolocation tools, and fraud safeguards. Most users on these platforms play for free and never make a purchase. Those that do make purchases typically do so in nominal amounts on average. They are used by brands to power loyalty programs, promotions, and digital engagement. These are legal tools, not illicit schemes.
AB 831 Offers No Evidence of Harm
There is no data, no state investigation, and no public record showing consumer harm tied to the games this bill targets. It is a sweeping solution to a problem that has not been demonstrated.
AB 831 Applies Rules Unevenly
Supporters of AB 831 have promoted or operated social casino games themselves, often without standard protections like age verification or responsible gaming tools. If these games are truly harmful, they should be prohibited across the board. Selective enforcement undermines the bill’s credibility and its purpose.
AB 831 Threatens Longstanding Promotions from Trusted Brands
Companies like Starbucks, Microsoft, and Marriott use chance-based sweepstakes as part of customer rewards and loyalty programs. AB 831’s vague definitions risk categorizing these common promotions as criminal activity.
See Appendix B for an example of a recent Microsoft promotion that would likely be made illegal under AB 831.
Conclusion: AB 831 Makes California Smaller, Not Stronger
California has always been the state of ‘more:’ more freedom, more innovation, more discovery, more opportunity. AB 831 pulls in the opposite direction. It would make California smaller: Less open, less creative, less bold. This industry stands ready to have a thoughtful conversation on addressing the perceived problem and would even go as far as suggesting a state regulatory framework that can generate needed revenue for the state.
We respectfully urge you to vote no on this last-minute gut-and-amend effort and make it a 2-year bill. Do not create new crimes without clear evidence. Do not restrict economic activity and innovation through last-minute legislative language. And do not let the demands of a few define the future of California’s digital economy.”
As the letter states, Appendix B points to a non-casino promotion that the SPGA says could come into question if AB 831 becomes law.
SPGA points to Microsoft sweepstakes as unintended consequence
Appendix B of the letter identifies a sweepstakes that Microsoft offers to users of its products and services. According to the appendix, the sweepstakes would violate California law on five points if AB 831 becomes law.
- Online contest
- Sweepstakes utilizes multiple currencies
- Users can acquire free entries in sweepstakes
- Contest uses draw-based lottery to determine prizes
- Sweepstakes awarded real money prizes
Despite these admonitions of the SPGA, Valencia presented the bill to the California Senate Governmental Organization Committee on July 8. During the committee’s hearing, Valencia encouraged the committee to report the proposal out favorably.
More deliberation on AB 831 is ahead, but the bill’s possible enactment in 2025 meets the SPGA’s cause for concern. Further communication between Valencia and SPGA members could address those fears.
