A California proposal aimed at limiting youth exposure to online gambling could significantly raise legal and compliance risks for digital operators, particularly those that rely on targeted advertising and mobile platforms to grow their user base.
AB 2617, introduced by Assemblymembers Pilar Schiavo and Mia Bonta, would create new restrictions on how gambling and prediction markets interact with minors, while opening the door to substantial financial penalties and lawsuits if companies fail to keep underage users off their platforms.
Violations could include paying out the greater of $2,500 per incident up to $1 million per minor or three times the “economic and noneconomic damages.”
For operators, the bill represents less of a product ban and more of a liability shift that puts the burden mainly on companies to prove they are actively preventing youth access.
Bill puts youth access on operators shoulders
The measure, titled Protecting Kids from Online Gambling Act, would require platforms to verify a user’s age before allowing access to gambling or prediction market services.
There is, of course, no regulated online gambling in California, which also banned sweepstakes last year. Prediction markets, especially those operated by regulated gaming entities including DraftKings, Fanatics and FanDuel, also use industry-standard know your customer practices to make sure the customer is legal.
Neither sponsor commented on the legislation when reached by LSR.
Under the proposal, operators would be required to collect only the information necessary to verify a user’s age and delete that information once verification is complete.
Formal age verification standards would need to be released by July 1, 2027 with operators putting them in place by Jan. 1, 2028.
California gambling ad restrictions addressed separately
In addition to access requirements, the proposal would prohibit operators from advertising online gambling or prediction markets to minors.
The bill gives several examples of banned advertising toward minors:
- paid advertisements
- influencer marketing
- affiliate marketing
- algorithmic promotion
- cross platform promotional placements
Violations would be classified as unfair competition under California law, giving the state attorney general or local prosecutors authority to seek penalties and injunctive relief.
Supporters cite youth gambling exposure concerns
Supporters of the bill say the proposal is designed to address growing exposure to gambling content among minors.
“Predictive gambling companies are running the Big Tobacco playbook,” said James P. Steyer, the founder and CEO of advocacy group Common Sense Media, which supports the legislation.
“Our research shows more than a third of boys age 11 to 17 are already gambling, and most of them didn’t go looking for it. It found them.”
