Gambling: operation of a contest or sweepstakes.

Assembly Member Valencia's legislation targets online gambling-themed sweepstakes by prohibiting the operation of games that simulate casino activities through websites and mobile applications. The bill expands existing contest regulations to explicitly cover digital platforms offering slot machines, poker, table games, sports betting, and similar gambling-themed entertainment that awards cash prizes or equivalents.

The measure establishes new criminal penalties for operating or supporting online sweepstakes games in California. Financial institutions, payment processors, gaming content providers, and other entities face misdemeanor charges carrying fines between $1,000 and $25,000 and up to one year in jail for knowingly facilitating these operations. The bill defines prohibited games as those using direct or indirect consideration systems where players can win prizes through simulated gambling activities.

The legislation preserves exemptions for legitimate promotional contests conducted occasionally by businesses as marketing tools, provided they are tied to substantial product or service sales. It also maintains existing authorizations for licensed gambling enterprises and the California State Lottery while clarifying that games not awarding cash prizes remain permissible under state law.