The legal noose is tightening around sweepstakes casinos in the U.S., with lawmakers and regulators across multiple states introducing or enacting legislation aimed at shutting down unregulated gaming disguised as “sweepstakes” or “social casinos.”
These platforms, often styled to mimic real-money gambling, operate under dubious legal interpretations and have drawn increasing scrutiny from attorneys general, gaming commissions, and tribal authorities. What was once a quiet grey market is now a hotbed of legal activity—and states are beginning to fight back with clear, enforceable statutes.
Here’s a breakdown of the latest sweepstakes crackdown, state by state, including legislation identifiers where available.
New York: Senate Bill S9226
- Action: Passed by both the Senate and Assembly.
- Senate Bill: S9226
- Key provision: The bill amends state gambling law to explicitly prohibit internet-based games that simulate traditional casino experiences and are monetized via “virtual currency” and sweepstakes mechanics.
- Status: Awaiting signature from Governor Kathy Hochul.
- Impact: If signed, the law would directly target platforms like Chumba Casino and others operating in New York.
Michigan: House Bill 5662
- Action: Introduced in May 2024.
- Bill: HB 5662
- Key provision: Redefines illegal gambling to include sweepstakes sites using proxy currency or chance-based promotional entries.
- Details: The Michigan Gaming Control Board supports the bill and says it will enhance enforcement against sweepstakes-style operators.
- Status: Under review in the Michigan House.
Illinois: Senate Bill 3717
- Action: Introduced in the Senate.
- Bill: SB 3717
- Key provision: Seeks to define and criminalize unlicensed “promotional sweepstakes gambling” operations.
- Status: In committee review. Expected to move in the fall legislative session.
Arizona
- Action: No current legislation introduced.
- Development: Attorney General Kris Mayes issued an advisory opinion concluding that sweepstakes casinos likely constitute illegal gambling under current state law.
- Effect: Opens the door for law enforcement to begin pursuing civil or criminal action without new statutes being passed.
Connecticut
- Action: Regulatory crackdown.
- Details: The Department of Consumer Protection suspended the license of High5Games and brought over 1,000 counts of illegal gambling charges tied to sweepstakes activity.
- Approach: Uses existing gambling laws and licensing controls rather than new bills.
Industry Retreat and Risk
The wave of enforcement is already having real impact. Several platforms have withdrawn from newly hostile markets, including Connecticut and Montana. Legal experts note that few, if any, sweepstakes operators have contested these state actions in court—a sign that their legal position is weaker than initially thought.
As more states pass explicit bans or reframe existing laws to include proxy-currency models and prize-entry mechanics, the sweepstakes business model may soon become untenable in much of the U.S.
Multiple industry figures and policymakers have pointed out the deceptive design of sweepstakes casinos, often blurring the lines between games of chance and legal promotional giveaways.
Michigan Gaming Control Board spokesperson Mary Kay Bean noted, “These operations are meant to look and feel like online gambling. The difference is, they’re not licensed, they’re not taxed, and they’re not held to any consumer protection standards.”
What’s Next
If the New York bill becomes law, it may serve as a model for other states seeking to close regulatory gaps. Lawmakers in California, Texas, and Florida are reportedly preparing similar legislation, though no formal bills have yet been filed.
Industry analysts expect that more states will follow suit over the next six to 12 months, with enforcement likely to shift from warnings to prosecutions as legal frameworks solidify.
Read the original source article on iGaming Business.