Written by :
Published on :
It wasn't too long ago that sweepstakes casinos were all the rage when it came to the online gambling sector. That might still be the case if it weren't for the current prediction market craze. Maybe that's a plus for these social online casinos as state regulators focus more on that other elephant in the room. Sweepstakes casinos, unlike their real money online casino counterparts, claim to be free-to-play but obviously can only be profitable by pushing actual money purchases once a player gets hooked. Gambling911.com looks at the current state of legality for certain US states in the sweepstakes sphere.
The State of Sweepstakes Casinos
To date, six states have outward bans on sweepstakes casinos. These include Connecticut, Montana, New Jersey, Nevada and two juggernauts in California and New York State.
New York
New York Governor Kathy Hochul has signed Senate Bill 5935 into law and NY becomes the 6th state to expressly ban online sweepstakes casinos by statute.
California
The law specifically prohibits operating or supporting “online sweepstakes games” that use a dual-currency model and simulate gambling within the state. Violations are criminal misdemeanors, carrying penalties of up to one year in jail and $25,000 per violation.
This is a massive blow to the sector considering the high profile Hollywood heavyweights, including none other than Ryan Seacrest, who have promoted these types of casinos.
California currently does not regulate real money online casinos.
Connecticut
In 2025, the Connecticut legislature passed Senate Bill 1235, which explicitly prohibits unlicensed operators from offering or promoting sweepstakes or promotional drawings that allow real or simulated online-casino gaming or sports wagering.
Real money online casinos are regulated in the state. However, it is important to understand that only DraftKings and FanDuel are currently regulated here as we enter 2026.
Montana
In May 2025, Montana passed Senate Bill 555 (SB 555), which expands the state’s ban on “internet gambling” to explicitly cover “online casinos, by whatever name known”
New Jersey
New Jersey is another US state that regulates iGaming platforms. As a means of protecting this industry, the state banned sweepstakes casinos, courtesy of Assembly Bill 5447 / Senate Bill 4282. Specifically platforms that use a “dual-currency” system (e.g. “Gold Coins” + “Sweeps Coins”) are mentioned as part of this law.
The Garden State has long regulated real money online casinos, but only the following are licensed by NJ regulators:
- BetMGM Casino
- FanDuel Casino
- Caesars Palace Online Casino
- Bally Bet Casino
- Bet365 Casino
- BetRivers Casino
- Golden Nugget
- PlayStar Casino
Nevada
A new law — SB 256 — was passed by the Nevada legislature in 2025 that bans these types of casinos. It goes without saying, real money casinos are legal in the Silver State.
Next on the Radar for Possible Bans
Not every attempt to ban sweepstakes casinos has been successful.
Mississippi lawmakers tried - and failed - earlier this year (2025).
These US states - Mississippi included - have sent out cease and desist letters to sweepstakes casino operators:
- Michigan - among the more aggressive
- Wyoming
- Maryland
- Pennsylvania
- Deleware
- Louisiana
- Arizona
- Minnesota
- Tennessee
Both Louisiana and Wyoming have gone as far as to have their Attorney Generals take action.
It should be noted that sweepstakes casinos tend to have a foothold in the US and, unlike offshore casino operators licensed in such jurisdictions as Malta, Curacao and Antigua, directly target residents of US states.
- Chris Costigan, Gambling911.com Publisher
