California secures a $3.5 million settlement from Pong Games Studios over allegations of illegal gambling activities
In a significant move to protect consumers and communities, California Attorney General Rob Bonta has secured a judgment against Pong Games Studios for continuing to offer illegal gambling in California. The judgment, approved by the Superior State of California, was intended to halt unlawful activities and get Pong's illegal gambling software out of California.
The judgment, announced on October 29, 2021, requires Pong Games Studios to pay $3.5 million to California and halt operations. The company had previously agreed to pay a similar amount and halt operations due to offering illegal gambling, but it continued to operate in California despite the agreement.
The games offered by Pong were presented under the guise of lawful sweepstakes, according to California AG Rob Bonta. However, the Superior Court agreed with prosecutors that Pong's skill exercise only required participants to perform a simplistic graphical color bar exercise before cashing out their gambling winnings. This, the court found, was not enough to eliminate the element of chance and classify the games as skill-based, as Pong had claimed.
Pong's "Sweepstakes Gambling System" was designed to conform to laws governing promotional sweepstakes competitions. However, the company's tactics were seen as a way to get around the legality of free-to-enter competitions in California by selling customers time on the machines instead of receiving a buy-in.
The illegal devices and software of Pong have been magnets for criminal activity, according to the Kern County District Attorney Cynthia J. Zimmer. She stated that Pong has flouted California law for years, flooding the state with illegal gambling devices and profiting off of harm done to vulnerable communities.
It's important to note that sweepstakes casinos are currently legal in California if they comply with sweepstakes laws, notably the "no purchase necessary" clause, where Sweeps Coins are won, not bought. However, real money online casinos and sports betting remain illegal in California as of 2025, though legalization efforts continue and may progress in 2026 or later.
Assembly Bill AB831 is a key pending regulation aiming to ban sweepstakes casinos entirely, driven by Tribal Gaming and public safety concerns. The bill has advanced unanimously through the Senate Public Safety Committee and is pending in the Senate Appropriations Committee as of August 18, 2025.
AG Bonta expressed gratitude to task force partners for securing this important win against illegal gambling operations. The judgment against Pong Games Studios serves as a clear message to other makers of illegal gambling software to take their business elsewhere.
References:
- California Online Gambling Laws and Regulations
- California Assembly Bill AB831
- California's Sweepstakes Laws
- California Online Gambling: A Comprehensive Guide
- California Online Gambling: The Current State and Future Prospects
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