Gambling: operation of a contest or sweepstakes.

Assembly Member Valencia's legislation targets online gambling-themed sweepstakes by prohibiting games that simulate casino activities while offering cash prizes through direct or indirect payment systems. The bill expands existing contest regulations to explicitly cover internet websites and mobile applications that mimic slot machines, video poker, sports betting, and other gambling formats.

The measure establishes new criminal penalties for operating or supporting online sweepstakes games in California. Individuals or entities conducting these activities, along with payment processors, platform providers, and other facilitators, face misdemeanor charges carrying fines between $1,000 and $25,000 and up to one year in county jail. The provisions define online sweepstakes games as those using dual-currency systems where players can participate through direct purchase of credits or indirect means like promotional bonuses to potentially win cash prizes.

While preserving exemptions for licensed gambling enterprises and the state lottery, the bill requires enhanced disclosures from legitimate contest operators regarding participant odds, maximum costs, and prize distribution methods. These requirements apply to both traditional and digital formats but do not affect promotional sweepstakes conducted occasionally by businesses as advertising tools or games awarding only non-cash prizes.