Summary
- Connecticut is set to become the second state to completely prohibit online sweepstakes casinos.
- The proposed draft law received unanimous approval from both the House and the Senate, with no dissenting votes.
- Trade organizations have criticized the decision, arguing that it will boost black market activity and result in a decline in innovation and associated benefits.
Connecticut lawmakers are emerging as strong opponents of the online sweepstakes casino industry. After Montana was the first state to ban this activity, Connecticut has potentially become the second, or third (considering recent actions in Louisiana). This is highlighted by the passage of Senate Bill 1235, which received overwhelming support in the House of Representatives with a 146-0 vote, following a unanimous Senate approval of 36-0.
Connecticut poised to kill sweepstakes casinos
Bipartisan support is rare, but the issue of online sweepstakes casinos has managed to garner it. Currently, only Governor Ned Lamont's signature is required for Connecticut to become the second state in the nation to specifically ban sweepstakes, with the prohibition taking effect on October 1, 2025, as stipulated in SB 1235. Jeff Duncan, Executive Director of the Social Gaming Leadership Alliance and former Congressman, has criticized this decision in a public statement. He described the move as disappointing and warned of the unintended consequences it could have on consumers. It's unfortunate that this legislation was rushed through with inadequate information and minimal engagement with legitimate industry operators who prioritize player protection. This outcome benefits the black market and other interest groups that lobbied for this bill using falsehoods and misinformation, Duncan stated. According to Duncan, this law ultimately stifles innovation, competition, and potential benefits for the state. The new legislation classifies platforms offering sweepstakes as a Class D Felony, punishable by up to five years in prison and a $5,000 fine. The bill's passage was facilitated by its combination with other lottery operation changes and its alignment with a broader wave of dissatisfaction toward the sweepstakes industry, which has been criticized for imitating gambling without adhering to the same stringent regulations.
Bill passage is now one signature away from becoming law
The state implemented SB 1235 to impose stricter regulations on lottery couriers, a contentious issue in Texas. Lawmakers there have acted quickly to dissolve the lottery regulator and transfer its responsibilities to a different state agency, although this transition has been delayed. Meanwhile, Connecticut is on the verge of banning sweepstakes, pending the governor's approval. Other states, including Louisiana, New Jersey, and New York, are considering similar actions. The industry has come under increased scrutiny, prompting many companies, such as VGW, to proactively reduce their sweepstakes operations in areas like New York, while maintaining their non-redeemable currencies.
Louisiana is all but certain to outlaw sweepstakes as well
Recently, the state of Louisiana has enacted a bill prohibiting online sweepstakes casinos, successfully passing it in both the House and Senate with unanimous support. Governor Jeff Landry is expected to sign the bill into law, as a veto seems improbable given the overwhelming backing from legislators. Duncan commented on the situation in Louisiana, stating, It's unfortunate that this legislation was quickly passed on the basis of incomplete information. As a result, residents are deprived of safe, fair, and free-to-play entertainment that millions of Americans enjoy, while black market operators profit.
