Sweepstakes Casino Bills and Bans

Bills to ban the dual-currency model

Attempts to regulate sweeps

New Jersey S1500, introduced January 13 by Sen. Joseph Cryan. It would designate sweepstakes casinos as internet gaming and require them to obtain a license through the Division of Gaming Enforcement, partner with a licensed Atlantic City casino, submit to independent audits, verify players are 21+, and pay the same iGaming tax rates as regulated online casinos. It’s currently sitting in the Senate State Government, Wagering, Tourism & Historic Preservation Committee — the same place his identical 2025 bill died.

Worth noting: this is Cryan’s third attempt at this. He filed in 2025 in both chambers; the Assembly version was withdrawn in April and the Senate version stalled as the ban bill took over the agenda. The SGLA’s goals align with S1500, but it has no real momentum with a ban already in place in New Jersey and a legislature that just voted to prohibit the model.

Outside of NJ, the only other “regulation” action in 2026 is failed floor amendments. Indiana had two separate regulatory proposals killed during HB1052’s passage, and a Virginia lawmaker floated a similar idea informally. No other state has a standalone regulation bill filed.

List of failed bills

States with bans in place

Timelines of events

How it worked: The free entry model

Sweepstakes casinos operate in a legal gray area that has existed for decades. The model is built on a well-established principle in U.S. promotional law: a sweepstakes is legal as long as it eliminates one of three elements — prize, chance, or consideration. By offering a free alternative method of entry, operators have historically argued their platforms are promotions, not gambling.

For years, that argument held up. No federal law explicitly bans the model, and most state gambling statutes were written long before online gaming existed, leaving regulators with little clear authority to act.

That started changing in 2025. Montana became the first state to pass an explicit ban, followed quickly by Connecticut, New Jersey, New York, and California — the latter wiping out roughly 20% of the industry’s U.S. revenue in a single law. Rather than waiting for legislatures, attorneys general in Tennessee, Minnesota, Illinois, Louisiana, and Maryland used existing consumer protection and gambling statutes to issue cease-and-desist letters to dozens of operators. Most complied and exited those markets.

The legal theory driving both approaches is the same: that Sweeps Coins — the redeemable virtual currency at the core of the model — constitute “something of value” under state gambling law, making the platforms unlicensed casinos regardless of how entry is structured.

On one side of that debate stands the Social Gaming Leadership Alliance, the industry’s primary trade group, which rebranded sweepstakes casinos as “Social Plus” platforms in 2025 and has testified before state legislatures arguing the model is legal free-to-play entertainment, not gambling. On the other side, the American Gaming Association and casino suppliers like Light & Wonder have pushed hard for bans, arguing that unregulated sweepstakes platforms siphon revenue from licensed operators, undermine consumer protections, and compete without paying taxes or submitting to oversight.

The 2026 legislative session has seen the pressure intensify further. Indiana became the first state to pass a ban this cycle. Active legislation is advancing in Florida, Oklahoma, Tennessee, Virginia, Iowa, and Mississippi, among others. The bills vary in approach — some target the dual-currency model explicitly, others broaden the definition of illegal internet gambling to capture it indirectly — but the direction is consistent.

A handful of states, including Massachusetts and Ohio, are pursuing iGaming legalization bills that would ban sweepstakes casinos as a condition of bringing regulated online casinos online.

For players, the list of sites available on the map is shrinking. Sweepstakes casinos that once operated in 45-plus states are now blocked in a growing list of markets, with more expected to follow before the end of 2026. Operators face a choice between exiting states proactively or waiting for enforcement action.

A small number of states are exploring a third path: regulation rather than prohibition, with licensing frameworks that would bring sweepstakes-style platforms under state oversight. That debate is most visible in Indiana, where a regulatory amendment failed twice during the bill’s passage, and in New Jersey, where a competing bill proposes a licensing structure instead of a ban.