Where Are Sweepstakes Casinos Legal? State-by-State Guide

How Sweepstakes Casinos Are Legal in Some States?

Before we get into the state-by-state breakdown, here’s a quick look at what sweepstakes casinos are.

Sweepstakes casinos are online platforms that utilize a sweepstakes model to offer casino-style games, including slots and table games. Instead of wagering real money, players use virtual currency—typically Gold Coins for standard play and Sweeps Coins for entries that can be redeemed for real cash or prizes.

Because no direct money bets are involved, sweepstakes casinos can operate legally in many states where traditional online gambling isn’t allowed. 

I’ve broken down how sweepstakes casinos work in more detail in this guide, so feel free to check it out if you want a better understanding of how the system operates. This includes how platforms handle player locations, verification checks, and sweepstakes promotions to remain compliant across state borders.

Legality of Sweepstakes Casinos at the Federal Level

Sweepstakes casinos exist in a bit of a legal gray area, but one that’s well-defined at the federal level. The key piece of legislation in this context is the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. 

While UIGEA restricts certain types of online gambling, it targets explicitly financial transactions tied to illegal betting operations, not sweepstakes models.

What sets sweepstakes casinos apart is that they don’t require players to wager real money. Instead, participation is based on a promotional sweepstakes model, where entry can be free, and prizes are awarded randomly.

This format aligns with federal definitions of sweepstakes and falls outside typical gambling classifications, allowing the model to function within the broader regulatory framework.

Other federal oversight comes from agencies like the Federal Trade Commission (FTC), which enforces advertising and transparency standards. Sweepstakes promotions must meet strict compliance criteria, including clear disclosures and a no-purchase-necessary clause. 

While sweepstakes casinos are not subject to direct federal licensing requirements, their ability to operate legally still depends on compliance with these overarching policies. 

>> The Sweepstakes Model: How Sweepstakes Casinos Work

Sweepstakes Casinos Legal Status State-by-State

The legal status of sweepstakes casinos varies widely across the U.S., and the landscape is changing fast. For years, lawmakers mostly ignored these platforms. They weren’t seen as a big deal, just a quirky legal loophole used by a niche group of players.

But that’s no longer the case.

As sweepstakes casinos exploded in popularity and money started flowing through the system—money that isn’t taxed or tightly regulated—many states took notice. What used to fly under the radar is now getting serious attention from attorneys general and legislators.

Some states have already responded with cease-and-desist letters, effectively shutting down certain operators. Others have proposed passing outright bans or amending state laws to define gaming operations better and clarify what constitutes legal gambling.

Still, a handful of states remain on the sidelines, monitoring developments while evaluating potential licensing fees and opportunities for gambling tax revenue.

Below is a breakdown of where sweepstakes casinos stand in each state—legal, restricted, or banned—so you know what’s allowed where you live.

>> Find a Trusted Option: Best Sweepstakes Casinos

States With Formal Bans

California

California officially banned sweepstakes casinos after Governor Gavin Newsom signed Assembly Bill 831 (AB 831) on October 11, 2025. The law prohibits online sweepstakes games that use a dual-currency model and offer casino-style play for cash prizes. 

Violators face misdemeanor charges, including fines of up to $25,000 and up to one year in county jail.

The ban also extends to third parties that knowingly support illegal sweepstakes operations. It takes effect on January 1, 2026, requiring all operators to leave the state by year’s end.

• Ban / Restriction: Full ban effective January 1, 2026
• Action & Status: AB 831 signed into law; enforcement begins in 2026

Connecticut

Connecticut followed closely behind Montana with its legislative crackdown. Senate Bill 1235, signed into law by Governor Ned Lamont on June 16, 2025, reclassifies sweepstakes casinos as a Class D felony. This includes promotional games that simulate gambling, even without direct cash wagers.

The law carries a penalty of up to five years in prison and fines up to $5,000, and goes into effect on October 1. 

• Ban / Restriction: Banned
• Action & Status: SB 1235 signed into law; felony classification begins October 1

Montana

Montana became the first U.S. state to enact a full ban on sweepstakes casinos.

Gov. Gianforte signed Senate Bill 555 on May 23, 2025, which expands the definition of “internet gambling” to include platforms using any type of currency, including virtual ones like Gold Coins and Sweeps Coins. This effectively makes the dual-currency model used by many sweepstakes casinos illegal under state law.

Violators can face felony charges, including up to 10 years in prison and fines of up to $50,000. In anticipation, many sweepstakes operators have already geoblocked users from Montana.

Platforms that strip out real-world prize mechanics and operate as pure social casinos are still allowed.

• Ban / Restriction: Banned
• Action & Status: SB 555 signed into law; operators must exit the state by October 1

New Jersey

New Jersey has officially banned sweepstakes casinos.

In August 2025, Governor Phil Murphy signed A5447 into law, prohibiting sweepstakes-style gaming and expanding the definition of “prize equivalents” to cover digital currencies like Sweeps Coins. The law took effect immediately.

Earlier proposals aimed to regulate and license sweepstakes platforms, but lawmakers ultimately moved toward a full ban. Assemblyman Clinton Calabrese and other sponsors cited tax evasion risks, weak consumer protections, and unfair competition with state-licensed operators as the driving concerns.

New Jersey now joins states such as Connecticut, Montana, and Nevada in banning dual-currency sweepstakes platforms outright. Operators like Chumba and LuckyLand have already pulled out of the market in response.

Ban / Restriction: Full ban, effective immediately
Action & Status: A5447 signed into law; enforcement active

Washington

Washington has had a de facto ban on sweepstakes casinos for years. The state's gambling control commission enforces some of the strictest gaming policies in the country. Its legal definition of gambling includes any game involving prize, chance, and consideration, including models using non-cash currencies like Sweeps Coins.

As a result, major sweepstakes operators such as Chumba and LuckyLand have long geoblocked users in Washington. The state continues to pursue enforcement against any platform offering prize-based games without a license.

• Ban / Restriction: Banned
• Action & Status: Explicit legal ban; operators have withdrawn

States Cracking Down Without Formal Bans

Arizona

Arizona’s Department of Gaming (ADG) ramped up enforcement against unlicensed gambling operators in October 2025, issuing 7 cease-and-desist orders, including one to Stake.us. Regulators said the platforms violated state gambling laws covering promotion of gambling, illegal enterprise control, and money laundering, and ordered them to shut down immediately.

The ADG said the actions protect consumers and the state’s regulated market. Following the crackdown, several operators left Arizona.

• Ban / Restriction: Regulatory enforcement in effect
• Action & Status: Seven cease-and-desist orders issued; operators exiting the market

Arkansas

Arkansas is currently navigating significant changes in its sweepstakes casino laws. In March 2025, lawmakers introduced SB 524 and HB 1861, which would ban unlicensed sweepstakes operators using a dual-currency model while establishing a framework to legalize traditional iGaming under existing gambling businesses.

The proposed laws would classify sweepstakes-style platforms as illegal gambling and place oversight under the Arkansas Racing Commission.

The legislation includes an emergency clause that would allow it to take effect immediately upon passage. This push reflects a broader shift toward formalizing gaming regulations and capturing lost gambling tax revenue.

• Ban / Restriction: Pending ban with legalization of iGaming
• Action & Status: SB 524/HB 1861 under review; targets unlicensed operators under new state gaming laws

Delaware

Delaware’s Division of Gaming Enforcement has taken a similar stance to Michigan. While the state hasn’t passed specific legislation banning sweepstakes casinos, several operators have received cease-and-desist orders for operating unauthorized gaming platforms.

This has resulted in a de facto ban, with enforcement actions used to deter activity. By applying current regulatory interpretations, Delaware is asserting control over digital gambling activities without changing the legal code.

• Ban / Restriction: Regulatory enforcement in effect
• Action & Status: Multiple cease-and-desist letters issued; operators face legal pressure under current jurisdictional interpretations

Louisiana

Louisiana has stepped up enforcement against sweepstakes casinos even though legislative efforts have hit a roadblock.

In June 2025, the Louisiana Gaming Control Board issued 40 cease-and-desist letters to top platforms like Chumba and Pulsz, citing violations of state gambling laws. A bill (SB 181) to ban these platforms passed both chambers but was vetoed by Governor Jeff Landry.

Despite the veto, regulators have continued cracking down using existing enforcement tools. The Gaming Control Board has signaled its intent to revisit the issue in the next legislative session, likely proposing a revised law to close the current compliance gap.

• Ban / Restriction: Regulatory action; legislation blocked
• Action & Status: 40 cease-and-desist letters issued; vetoed ban expected to return

Maryland

Maryland has taken an assertive but still regulatory-first approach to sweepstakes casinos.

The state’s Lottery and Gaming Control Agency sent out at least a dozen cease-and-desist letters in the past year, labeling dual-currency sweepstakes platforms as noncompliant with state gambling rules.

Although legislative attempts to formalize a ban have so far failed, the ongoing enforcement campaign suggests Maryland may soon follow states like Connecticut and Montana in rewriting its gambling laws to close perceived loopholes. 

• Ban / Restriction: Regulatory oversight in effect
• Action & Status: 12 cease-and-desist letters issued; no formal statute, but future legislation expected

Michigan

Michigan hasn't passed a formal ban, but the state’s gambling control commission has increased pressure through enforcement. The Michigan Gaming Control Board has issued multiple cease-and-desist letters, arguing that prize-based sweepstakes games violate existing gambling laws.

While no statute directly prohibits sweepstakes operators, regulators interpret dual-currency platforms as incompatible with Michigan’s current licensing framework. This approach has created a high-compliance-risk environment, particularly for platforms operating without state authorization.

• Ban / Restriction: Enforcement without a formal ban
• Action & Status: Cease-and-desist letters issued; compliance risk remains high for operators

Mississippi

Mississippi has not passed a formal law banning sweepstakes casinos, but state regulators have made their stance clear. The Mississippi Gaming Commission has issued at least ten cease-and-desist letters to platforms using the dual-currency model, citing violations of existing gambling regulations.

Although a bill to prohibit sweepstakes-style gaming cleared the state Senate, it failed in the House, leaving the issue unresolved in the legislative arena. For now, enforcement actions are the primary tool, creating a complex compliance environment for operators still serving players in Mississippi.

• Ban / Restriction: Enforcement through regulatory interpretation
• Action & Status: 10 cease-and-desist letters issued; legislative ban failed to pass

Nevada

Despite being the gambling capital of the U.S., Nevada maintains a strict stance on sweepstakes casinos.

Under the state’s Gaming Control Act, any platform offering games with prize, chance, and consideration—even with virtual currency—is considered to be conducting illegal gambling unless properly licensed.

In early 2025, the Nevada Gaming Control Board (NGCB) issued a cease-and-desist order to Kalshi, forcing them to withdraw. Major operators like Chumba and LuckyLand soon geoblocked Nevada residents.

The legislature also passed SB 256, which increases penalties for unlicensed platforms and gives regulators more authority to act swiftly.

• Ban / Restriction: Enforced as unlicensed gambling.
• Action & Status: Cease-and-desist orders issued; SB 256 strengthens regulatory enforcement.

New York

New York is in the process of turning regulatory pressure into legislative action.

In mid-2025, Attorney General Letitia James issued cease-and-desist letters to 26 sweepstakes casino platforms, accusing them of violating state gambling laws. The New York Gaming Commission supported this effort, claiming that redeemable Sweeps Coins constitute “something of value,” making the games illegal under current state definitions.

Meanwhile, the state legislature passed SB 5935, which would formalize the ban. The bill is now awaiting the governor’s signature. If signed into law, New York will join the list of states with explicit bans, setting clearer legal standards and enforcement guidelines.

• Ban / Restriction: Pending complete legislative ban
• Action & Status: 26 cease-and-desist letters issued; SB 5935 passed and pending executive approval

Pennsylvania

Pennsylvania hasn’t passed a specific law targeting sweepstakes casinos yet, but the state’s enforcement is already underway.

The Pennsylvania Gaming Control Board (PGCB) issued cease-and-desist letters to 18 operators in April 2025, citing violations of current gambling laws. Prosecutors called the enforcement effort a “game of whack-a-mole,” as platforms quickly rebrand or relaunch.

Regulators have asked lawmakers to modernize Pennsylvania’s gambling statutes, suggesting future legislation is on the horizon. Until then, the PGCB will continue to use its existing regulatory authority to deter noncompliant platforms.

• Ban / Restriction: Enforcement active; law update pending
• Action & Status: 18 cease-and-desist letters issued; legislative modernization proposed

Tennessee

In September 2025, the Tennessee Sports Wagering Council (SWC) ordered Blazesoft’s Sportzino to leave the state for operating unlicensed sweepstakes-style gambling. The move followed similar cease-and-desist orders to Bovada and Legendz, both of which have since exited Tennessee.

The SWC has issued more than $600,000 in fines to illegal operators this year and continues to work with the Attorney General’s Office to strengthen enforcement.

• Ban / Restriction: Enforcement through cease-and-desist orders
• Action & Status: Sportzino and other operators withdrew following SWC action

States With Restrictions

Florida

Florida allows sweepstakes casinos, but under tightly controlled conditions.

The state imposes a $5,000 cap on any single redemption and requires promotional games with large prizes to be registered and bonded. Operators must also submit official game rules seven days before launching new sweepstakes promotions.

Although no outright ban exists, bills targeting dual-currency models (HB 953 and SB 1404) in 2025 signaled potential legislative movement. These efforts didn’t pass, but they reflect growing scrutiny over how sweepstakes casinos fit into Florida’s broader gaming laws.

• Ban / Restriction: Permitted with restrictions
• Compliance Requirements: $5,000 redemption limit; registration and bonding required for large promotions

Idaho

Idaho doesn’t formally ban sweepstakes casinos, but the state's definition of illegal lotteries makes full compliance nearly impossible. Since the law includes “prize, chance, and consideration,” any system that allows players to redeem Sweeps Coins for real money is treated as gambling.

To remain operational, most platforms strip out the cash redemption option in Idaho. Players can still use Gold Coins to play, but Sweeps Coins are rendered non-convertible, limiting the appeal and reducing player engagement.

• Ban / Restriction: Real-money redemption prohibited
• Compliance Requirements: No cash-out capability; Sweeps Coins disabled for redemption

States Where Sweepstakes Casinos Are Allowed or Unregulated

In most U.S. states, sweepstakes casinos are either explicitly allowed or exist in a legal gray area where no law currently bans or restricts them.

As long as operators follow federal sweepstakes guidelines—such as offering free entry and not requiring real-money wagers—they’re typically able to serve users without interference.

Here’s a list of all remaining states where sweepstakes casinos are currently accessible:

• Alabama
• Alaska
• Arizona
• Arkansas
• Colorado
• Georgia
• Hawaii
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Maine
• Massachusetts
• Minnesota
• Missouri
• Nebraska
• Nevada
• New Hampshire
• New Mexico
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Rhode Island
• South Carolina
• South Dakota
• Texas
• Utah
• Vermont
• Virginia
• West Virginia
• Wisconsin
• Wyoming

Regulatory Oversight and Enforcement

Sweeps casinos operate in a fast-moving, loosely regulated space, but that’s starting to change. As more money flows into these platforms, state gaming regulators are stepping up to take a closer look at their legal and regulatory framework.

Here's how enforcement is evolving and what platforms (and players) need to know to stay on the right side of the law.

State Gaming Commissions and Regulatory Bodies

Most states have a gambling control commission or regulatory body that oversees licensed gaming operations. Historically, these entities ignored sweeps casinos, viewing them as exceptions to standard gambling businesses.

But that’s shifting fast.

In states like Pennsylvania, New Jersey, and Louisiana, regulators are now asserting authority over sweepstakes operators. By interpreting these platforms as unauthorized gaming operations, they can issue cease-and-desist letters, recommend legislative updates, or even pursue civil or criminal enforcement.

Enforcement Mechanisms and Penalties

Once a sweepstakes casino is deemed noncompliant, enforcement options include fines, lawsuits, and even criminal penalties. The most common step is a cease-and-desist letter, warning operators to exit the state or face legal action. 

Consumers also play a role. Many states offer reporting portals for filing complaints against deceptive sweepstakes promotions or unresolved payouts. In cross-border cases involving fraud or unauthorized transactions, state regulators may collaborate with federal agencies, such as the Federal Trade Commission (FTC) or the Department of Justice (DOJ).

Compliance Programs and Best Practices

To operate legally, sweeps casinos must adopt compliance practices similar to those of regulated gambling businesses. These include rigorous KYC verification checks, accurate record-keeping of Sweeps Coin redemptions, and adherence to responsible gaming standards.

Advertising is another high-risk area. Regulators in states like Florida and New York have scrutinized claims of “risk-free” gambling or misleading odds, which can trigger enforcement under consumer protection laws.

Cross-Border Operations Challenges

Serving players across multiple states means navigating dozens of different gambling laws. Platforms must geofence banned states, such as Montana or Washington, using IP data, device location, and billing information.

Some operators use advanced geolocation technology that syncs with mobile devices or Wi-Fi networks. Others are exploring multistate compliance frameworks that mimic those used by online poker networks—but these remain theoretical for now.

Tax Implications on Winnings

Even though sweepstakes games are free to enter, any redeemed prizes are considered taxable income. Most operators require players to complete IRS forms, such as the W-9, for redemptions exceeding $600. Come tax season, they may issue a 1099 form reporting your gaming tax revenue.

It’s up to the player to report this income. If left unreported, it can lead to penalties, even if the original prize came from a “free” sweepstakes entry.

Future of Sweepstakes Casino Regulation

The sweepstakes casino industry isn’t going anywhere, but how lawmakers and courts treat it is evolving fast. With billions of dollars moving through these platforms—and little to no state oversight—governments are starting to rethink how these games should be classified, taxed, and regulated. 

Emerging Trends in State Legislation

Across the country, jurisdictions are approaching the issue of sweeps casinos from different angles.

Some states—like New York, New Jersey, and Connecticut—are pushing for complete bans or redefining key terms in gambling statutes to include dual-currency mechanics. Others are exploring regulation, looking at how these platforms might be brought under existing gaming commissions with new licensing and compliance structures.

Much of this is being driven by pressure from traditional gambling interests.

Commercial casinos and tribal operators argue that sweepstakes sites offer real-money experiences without paying taxes or licensing fees. On the other hand, consumer protection groups have raised concerns about underage access, unclear odds disclosures, and misleading sweepstakes promotions.

At the same time, the tech is evolving. Platforms are experimenting with sports betting-style sweeps, loot-box mechanics, and multiplayer tournaments—all of which raise new questions about where the line between games and gambling falls.

Economic Impacts and State Considerations

States are beginning to realize the economic footprint of sweeps casinos. Some of the largest platforms process millions in redemptions every month. That’s real money exiting the system—untaxed, untracked, and unregulated.

For lawmakers, this opens up two possibilities: either shut it down or bring it into the fold. Licensing sweepstakes platforms could offer a new revenue stream through taxes and licensing fees. It could also spur job creation in compliance, fraud prevention, and tech.

On the other hand, some officials worry about diluting lottery revenues or cannibalizing the revenue of licensed online casinos.

Still, momentum is growing. If even a third of currently active states created a legal framework for sweepstakes regulation, analysts estimate the market could return hundreds of millions annually in new state tax revenues.

Legal Challenges and Court Precedents

As the laws shift, so do the legal battles. Multiple class-action and regulatory lawsuits are now winding through the courts, each with the potential to reshape how sweepstakes platforms operate.

One major issue is whether Sweeps Coins count as “something of value,” a key element in most state gambling laws, if courts rule that buying Gold Coins—which come with “bonus” Sweeps Coins—is essentially paying for a chance to win, which could undermine the entire legal model.

We’re already seeing this play out:

• High 5 Games faced a jury verdict in Washington and settled in Connecticut for targeting self-excluded users. The court found their virtual chips were legally equivalent to real wagers.
• Blazesoft, which runs Sportzino, Zula Casino, and Fortune Coins, is being sued in multiple states for allegedly disguising real-money gambling behind the dual-currency structure.
• California recently banned all sweepstakes casinos after Bill 831 was unanimously approved.

These cases are critical. How judges interpret terms like “consideration” and “chance” will decide whether sweepstakes casinos remain a legal alternative or get recategorized as online gambling.

Sweepstakes Casino Legality FAQ

In which states are sweepstakes casinos illegal?
As of mid-2025, sweepstakes casinos are entirely banned or functionally blocked in California, Montana, Connecticut, and Washington. Other states, such as Arizona, Tennessee, New York, New Jersey, Louisiana, Mississippi, Maryland, Michigan, Delaware, and Nevada, have issued enforcement actions or have bans pending.

What is the legal age to play at sweepstakes casinos?
In most states, the minimum age is 18 years old, though some platforms voluntarily set the bar at 21. Age requirements are typically listed in the site’s terms and conditions, and age verification is required before redeeming prizes.

Which states are best for sweepstakes casinos?
States like Texas, Illinois, and North Carolina currently allow sweepstakes casinos with minimal restrictions. These states have large player bases, minimal legal hurdles, and well-established platforms that operate openly.

Do I need to verify my identity when playing?
Yes, especially when it comes time to redeem Sweeps Coins for cash or gift cards. Most operators require a government-issued ID, proof of residency, and sometimes additional verification steps to confirm you're in an eligible state.

Do I need to purchase to participate in sweepstakes casinos?
No. Sweepstakes casinos are legally required to offer a free method of entry—usually by requesting Sweeps Coins via mail or claiming daily bonuses. That said, most players do choose to purchase Gold Coins, which come with bonus Sweeps Coins, to speed up gameplay.

What are the best sweepstakes casinos to play in legal states?
Crown Coins, RealPrize, Pulsz, McLuck, and Jackpota are my 6 highest-rated sweepstakes casinos. Feel free to check out the complete list for more options.

Are sweepstakes casinos safe?
Not always. Since state regulators don’t license them, oversight is limited. A good way to gauge safety is by checking Trustpilot ratings, social media presence, and player feedback on forums like Reddit. Reputable platforms are usually easy to find, and the shady ones stay quiet for a reason.

Are winnings from sweepstakes casinos taxable?
Yes. In the U.S., sweepstakes winnings are considered taxable income, even if earned through a “free-to-play” model. Most platforms will issue a 1099 form if you redeem more than $600 in a calendar year. Be prepared to report these earnings on your federal and possibly state tax return.

Can I face legal consequences for playing at a sweepstakes casino?
No. All current laws and enforcement actions are aimed at the operators, not the players. Even in states where sweepstakes casinos are banned, there are no penalties for individual users. There are no known cases of players getting fined, charged, or otherwise penalized for using these sites.

What happens if a site I use suddenly becomes banned in my state?
If your state moves to ban sweepstakes casinos, most platforms will simply geoblock access. You might lose the ability to play or redeem prizes, especially if you haven’t verified your account. It’s a good idea to cash out any Sweeps Coins and monitor updates from the operator to avoid losing access.