The Social Gaming Leadership Alliance is asking lawmakers not to move forward with Assembly Bill 831 (AB831). The group says banning online social games that use sweepstakes could wipe out more than $1 billion a year from California’s economy and block the state from gaining hundreds of millions in potential new tax revenue.
Fresh research from Eilers & Krejcik Gaming, prepared for the alliance, shows that social casinos with sweepstakes bring in about $802 million in direct spending in California, with money flowing into marketing, payment processing, and cloud hosting services. The report also finds the industry supports 1,191 jobs across the state and adds another $208 million to household earnings through ripple effects in the supply chain.
“Social casinos with sweepstakes…generate more than $1 billion in combined direct and indirect benefit to California annually,” the study states, adding that the industry’s contributions are likely understated because the analysis leaned on “conservative assumptions.”
SGLA urges regulation over AB831, which seeks to ban sweepstakes gaming
The analysis from Eilers & Krejcik also points out that California could benefit in a big way if the state chose to regulate instead of ban the industry. A licensing system combined with a tax on player purchases could bring in somewhere between $200 million and $300 million every year. Just a 7.25% tax on player purchases would raise about $175 million annually, and if the tax rate were higher, the total could climb past $272 million.
At the same time, the Senate Appropriations Committee has flagged its own concerns about AB831. The committee’s review said the bill could create “potentially significant” new costs for the California Department of Justice, for trial courts, and for counties that would have to handle enforcement, all while cutting off both existing and future revenue streams.
At the hearing, tribal leaders and industry stakeholders testified against the bill. Eric Wright, CEO of the Kletsel Economic Development Authority, warned lawmakers: “This bill lacks unanimous support among California tribes, has advanced without meaningful consultation with many of us, and threatens our inherent right to create legitimate revenue streams to support our people.” Representatives from Virtual Gaming Worlds (VGW) and ARB Interactive also voiced opposition.
🚫 California’s AB 831 is misguided. 💬⁰
“It is outrageous that lawmakers are prioritizing a bill to ban online social games…this is not what I want my representatives to focus on.” – Stephanie M., Santa Cruz
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— Social Gaming Leadership Alliance (SGLA) (@SGLeadership) August 15, 2025
Jeff Duncan, SGLA’s Executive Director and a former congressman, framed the decision: “California has a choice: ban a thriving industry or regulate online social games to safeguard players, protect $1 billion annually in current economic benefits and unlock hundreds of millions in new revenue for the state each year.”
The SGLA says it is still pushing for a full regulatory framework that puts consumer protections front and center. That would mean strict age checks, clear and transparent operations, built-in spending limits, and tools that let players exclude themselves if they need a break.
Featured image: Canva
