A wave of legal and regulatory action is reshaping the future of sweepstakes casinos across the United States. Once seen as a legal workaround to traditional gambling laws, these dual-currency platforms now find themselves at the center of a nationwide crackdown.
With multiple states advancing legislation or enforcement actions, the legal model that has allowed sweepstakes casinos to operate in a gray zone is rapidly being challenged—and in some places, entirely dismantled.
California: The Next Big Battleground
California is currently leading the charge with Assembly Bill 831, a bill designed to outlaw gambling-themed sweepstakes games. Introduced in June 2025, AB 831 has gained traction quickly. It was passed by the Senate Governmental Organization Committee on July 8 and is now headed for the Senate floor.
What makes California’s bill especially significant is its broad support, including endorsements from major tribal organizations like the California Nations Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nations. These groups argue that sweepstakes casinos undermine the exclusive rights granted to tribes under long-standing state gaming compacts.
Momentum Across the U.S.
California isn’t alone. Similar legislative bans have already passed in Connecticut, Montana, and Nevada. In New York and New Jersey, bills banning sweepstakes casinos have been approved by both houses and are now awaiting action from the governors.
Meanwhile, Louisiana’s governor vetoed a recent sweepstakes ban bill—but in a signing statement, he declared that sweepstakes casinos are already illegal under existing state law. Enforcement actions have followed.
Other states like Mississippi and West Virginia have opted for cease-and-desist letters and subpoenas rather than new legislation, asserting that sweepstakes platforms are violating current gambling laws.
The coordinated messaging from attorneys general, gaming commissions, and tribal authorities across multiple jurisdictions is clear: these platforms are increasingly viewed as unregulated gambling, not promotional contests.
What’s the Legal Debate?
The central legal issue comes down to the definition of gambling.
All 50 U.S. states define gambling by three elements: consideration, chance, and prize. Traditional sweepstakes avoid being classified as gambling by removing “consideration”—offering a “no purchase necessary” method of entry. This is the model used by retail giveaways and brand promotions nationwide.
Sweepstakes casinos argue they follow this model by using dual virtual currencies:
- One (e.g., Gold Coins) is given freely and used for fun play.
- The other (e.g., Sweeps Coins) can be acquired for free or purchased, and then redeemed for real-world prizes.
Critics, however, say this structure is designed to skirt the law while still mimicking casino gameplay. The use of casino-style games like slots, poker, and roulette—paired with the ability to win redeemable prizes—has led regulators to treat these platforms as unlicensed gambling operators, regardless of the no-purchase-required claim.
The Industry Pushback
The Social and Promotional Games Association (SPGA) and other industry advocates have responded aggressively. They argue that many of these new laws are too broad and could impact more than just sweepstakes casinos.
In Montana, for example, a recent law bans platforms that “transmit or receive gambling information” using “any form of currency.” SPGA claims this wording could outlaw everything from brand loyalty programs to promotional giveaways.
In New York, the SPGA has warned that the pending ban could expose entrepreneurs, payment processors, software vendors, and even investors to legal risk, given how sweepstakes casino platforms rely on a larger ecosystem of service providers.
Could Regulation Be the Future?
Despite the wave of bans, some in the gaming industry are calling for a more collaborative approach—one that mirrors how daily fantasy sports (DFS) transitioned from legal uncertainty to regulated status.
Under this model, states would define the boundaries of legal sweepstakes gaming, introduce licensing requirements, and establish guardrails to protect consumers. This approach could satisfy both regulators and legitimate operators, while cutting off predatory or misleading platforms.
However, that future is far from guaranteed. For now, most states are opting for enforcement or outright prohibition rather than regulatory reform.
The Bottom Line
As of mid-2025, the legal environment for sweepstakes casinos is shifting fast. States that once ignored these platforms are now actively banning or investigating them. Others are warning third parties—including ad networks and payment processors—that enabling sweepstakes casino operations could trigger legal exposure.
Whether this leads to a full-scale prohibition of sweepstakes gaming or a more nuanced regulatory framework remains to be seen. But what’s clear is that the era of easy, under-the-radar sweepstakes casino operations is quickly coming to an end.
For platforms, affiliates, investors, and marketers, the message is simple: stay alert, stay compliant, and expect more scrutiny ahead.