For those who have been keeping up with the news, even casually, one topic that consistently makes headlines in the United States is sweepstakes social casinos. These platforms have been around for years, offering casino-style games without being classified directly under gambling regulations. They operate using a distinct legal model that employs virtual currencies, such as Gold Coins, which are available for free and can be used to play games with the chance to win prizes. This system allows players to join the fun without needing to make real-money deposits (although many choose to do so), making sweepstakes casinos a legal alternative to traditional online gambling in several states. The controversy arises from the fact that while sweepstakes social casinos promote free play and no deposits required, many feature an alternative currency, often called Sweeps Coins, which can be exchanged for real money in some form. Supporters argue that sweepstakes are completely legal and align with existing legal precedents.
What is happening with sweepstakes in the United States?
The sweepstakes social casino industry in the United States is facing significant challenges from several states. In May, Montana made headlines as the first state to ban these platforms, aside from Idaho and Washington, which have had longstanding restrictions. Governor Greg Gianforte signed Senate Bill 555, which will take effect on October 1, 2025. This legislation does not specifically target sweepstakes social casinos; rather, it imposes a general ban on any online casino accepting currency. This has led major sweepstakes casino operators, including the owners of well-known brands like Chumba Casino and LuckyLand Slots, to leave Montana. Mike de Graaff, Chief Compliance Officer at BetComply, stated, The rise of sweepstakes casinos presents the greatest challenge yet to the post-PASPA consensus on US betting and iGaming. The Social and Promotional Game Association (SPGA) has been vocal in its criticism of Montana’s action. The SPGA claims the state has prohibited something it can't adequately define. A spokesperson remarked, Montana has criminalized routine digital promotions with a vague law that fails to specify its target. This sets a dangerous precedent that could erode consumer trust, stifle business innovation, and disrupt longstanding legal marketing practices. Montana is not alone in scrutinizing the sweepstakes model. Recently, Connecticut and Louisiana have also pursued bans, although only one succeeded. Louisiana's proposed legislation passed unanimously but was ultimately vetoed by Governor Jeff Landry, who felt existing regulations were sufficient. In contrast, Connecticut moved forward, with Governor Ned Lamont signing Senate Bill 1235, making it this year’s second state after Montana to impose a complete ban. Additionally, New York is implementing measures to phase out promotional sweepstakes play. VGW, a major operator, announced plans to halt its Sweeps Coins offer. However, Gold Coins, which represent the free-to-play aspect promoted by operators, will remain available.
Is antagonism the only way forward?
New York Attorney General Letitia James has issued 26 cease-and-desist orders to various social and sweepstakes casinos, labeling them as illegal and demanding their immediate exit from the state. Meanwhile, Governor Kathy Hochul is deciding whether to sign Senate Bill 5935, which would ban online sweepstakes games and revenue from illegal markets. Efforts to ban sweepstakes have failed elsewhere, with states like Arkansas, Maryland, and Florida having attempted similar legislation without success. Despite these setbacks, these states and lawmakers may make future attempts, though recent efforts have largely been unsuccessful, except for a successful measure in Connecticut in mid-June. However, not everyone is discouraged by the current challenges facing the sweepstakes sector. Despite the increased opposition, there remains a sense of optimism. Rory Kimber, LuckyStreak's Commercial Director, remains skeptical that sweepstakes are facing extinction. There’s nuance here. While some areas in the US are shutting down sweepstakes, others are seeing growth, Kimber noted. Interest in responsible providers and games is surging in states where sports betting and online casinos remain unregulated. I foresee steady progress globally, although not as explosive as what we've just experienced, he added.
How is the sweepstakes industry taking these developments?
Sweepstakes social casinos are currently facing significant opposition. The initial resistance arose from the newly established Sweepstakes Play Gaming Association (SPGA), which claims that legislators, influenced by the regulated gambling industry, are targeting this sector without fully comprehending the sweepstakes model. The SPGA has made efforts to clarify the details of how the sweepstakes model operates, frequently highlighting that major companies like Pepsi, Coca-Cola, and Nike use sweepstakes to engage and reward their consumers. A new trade organization called the Social Gaming Leadership Alliance (SGLA), founded by VGW, also cites examples like Microsoft, which conducts a $2,000,000 sweepstakes contest for its users. VGW is not affiliated with the SPGA. Much like the SPGA, the SGLA aims to clarify the facts about our games, operations, and standards and advocate for what they consider appropriate industry frameworks. Both the SPGA and SGLA have consistently voiced their opinions against any attempts to ban sweepstakes social casinos. They remind lawmakers that these actions defy established precedents and emphasize that sweepstakes social casinos are enjoyed by millions of Americans. Legally, both organizations present strong arguments, and specifically targeting sweepstakes social casinos, as opposed to all casinos (as seen in Montana), may prove challenging. This leads us to consider: what will happen next?
Will others succeed in implementing Montana’s example
The key question now is what the future holds for the sweepstakes industry. Is this just a temporary disruption, where lawmakers are united as the traditional gambling sector becomes more competitive and aims to consolidate all potential gaming revenue? Or is this a struggle that will shape the coming years? In the short term, it's likely that individual states will attempt to oppose sweepstakes operators, with many successfully reducing the market shares of prominent companies in places like Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, West Virginia, among others. I don't foresee a quick resolution. This will drag on in the courts for years, often on a state-by-state basis, but it's evident that the era of sweepstakes casinos operating unnoticed is ending, mentioned de Graaff. Though a nationwide ban on sweepstakes is improbable, individual states will continue to challenge them, diminishing companies' market shares and in some instances, imposing penalties, as has been recently observed in Connecticut. While the industry is unlikely to vanish, as the SGLA and SPGA argue that sweepstakes have firm legal standing, this does not guarantee that the sweepstakes social casino sector will enjoy its previous freedoms or that its future is assured. Kimber offered a hopeful perspective: Sweepstakes have a unique advantage in the US market that we believe this recent surge of restrictions won't extinguish. Our advice is to remain steady and confident—sweepstakes are here to stay.
