Almost every other day, gaming boards across the US are debating how to regulate sweepstakes casinos, with growing concerns about the lack of oversight. One of the biggest battles is unfolding in California, where AB 831 is moving closer to shutting them down in the state.
On Wednesday (July 16), the California Public Safety Committee voted 6-0 to approve the bill in its current form. As we’ve reported before, several groups from the “social gaming” space have unexpectedly teamed up with organizations like the American Civil Liberties Union (ACLU) and others to push back.
Opponents of the bill argue it could have unintended consequences, potentially hurting legitimate promotional practices and slowing innovation. On the other hand, local tribal leaders believe sweepstakes casinos could eventually disappear entirely in California, and possibly nationwide.
So what’s going on with sweepstakes casinos in the US? And are they actually legal?
Are sweepstakes casinos legal in the US?
As it stands, sweepstakes casinos are legal in states where online gambling is banned for one simple reason: they are not considered gambling sites.
At a traditional online casino, you play games by wagering real money. At a sweepstakes casino, it’s different. You use virtual currencies, usually Gold Coins (GC) and Sweeps Coins (SC), instead of cash.
Another important point is that no purchase is required. Sweepstakes casinos are legally obligated to offer free play. Most of them do this by giving out free Gold Coins and Sweeps Coins in various ways.
One big reason sweepstakes casinos have become so popular is that traditional online casinos are still banned in all but six states. Even though online sports betting is now legal in more than 30 states, it’s still off-limits in some of the country’s biggest markets.
Which states have not banned sweepstakes casinos?
Sweepstakes casinos are legal in 48 states, but that doesn’t mean every provider operates in all of them.
States like California, Texas, and Florida are great examples. Even though traditional online casinos are banned there, sweepstakes platforms are allowed to run under local laws. That said, each state still has its own rules to make sure these sites comply with gambling regulations and promotional standards.
California
In California, sweepstakes casinos are able to operate legally thanks to the state’s general promotion laws. As long as these platforms follow the rules, like making sure players are at least 18, they can offer a wide range of games to adults. Even so, platforms like Stake.us have been hit with lawsuits from people who argue the site is really promoting gambling. The company, however, strongly denies those claims.
What surprises many people is that California, despite its progressive reputation, has yet to legalize traditional online gambling. Since 2019, there have been multiple attempts to bring it to the table, but each effort has faced strong resistance, especially from tribal casino groups worried about losing business to online competition. They are the only groups that are legally allowed to run gambling operations in the state, hence they’ve thrown their support behind AB 831.
What a week. Sweepstakes gambling will still die an ugly death. That’s not up for debate. As for DFS, I see this as an opportunity to redefine the industry on our terms.
— Victor Rocha (@VictorRocha1) July 4, 2025
Victor Rocha, conference chair of the Indian Gaming Association, has previously said: “After California, they’re not going to have much oxygen left.
“I think Texas is coming right behind us, especially when it’s this egregious exploitation.”
For now, sweepstakes casinos and daily fantasy sports are still fully legal and continue to fill the gap for Californians looking for online gaming options. However, in recent days, the state’s attorney general, Rob Bonta, voiced his disapproval of draft and pick’em-style daily fantasy contests, arguing that they amount to betting on sporting events.
Texas
Texas is another major market where sweepstakes casinos are booming, even though the state hasn’t legalized sports betting or real money online casinos. The legal landscape here has made it easy for these platforms to gain traction and attract plenty of players.
Known for its conservative stance on gambling, Texas has been slow to embrace change. While there’s been some movement toward expanding land-based casino options, legal online gambling still isn’t on the horizon. For now, sweepstakes casinos remain one of the few legal ways Texans can enjoy casino-style games online.
Georgia
Georgia has some of the strictest gambling laws in the country, and honestly, it’s hard to imagine the state ever approving traditional online casinos or sports betting. As of now, the only forms of gambling allowed are the state lottery, bingo, and charity raffles.
That said, Georgia does make room for social gaming and promotional sweepstakes. This means sweepstakes casinos can operate legally, giving players in the Peach State a way to enjoy online games. If you’re over 18 (or 21 for certain platforms), you can sign up and play at a social casino without breaking any laws.
Florida
Florida has its own set of rules for sweepstakes promotions, but they still leave room for platforms like Chumba, Hello Millions, and Pulsz to operate. These sites avoid the restrictions on traditional online casinos by using the sweepstakes model, which keeps them within legal boundaries.
In May, online sweepstakes casinos supporters scored another win after two proposed bills were pulled and set aside indefinitely in the Florida legislature.
Louisiana
Sweepstakes casinos were on the verge of being booted out of Louisiana until Governor Jeff Landry stepped in and vetoed the bill in June.
Senate Bill 181 sailed through the legislature with no resistance, passing 99-0 in the House and 38-0 in the Senate. But it came to a halt when critics argued the bill was too broad and would sweep up more than just sweepstakes casinos.
In his veto letter, Landry explained that SB 181 was unnecessary because Louisiana already has strict laws against online gambling. He pointed out that the existing framework makes additional legislation redundant.
Even so, Louisiana does not offer much when it comes to legal online gambling. Casino-style games, online poker, bingo, and most forms of online betting remain banned. The only exception is sports wagering, which became legal in 2021. For now, anyone looking to gamble has to stick to in-person casinos, which are scattered throughout the state.
Which states have banned sweepstakes casinos?
Connecticut became the second state after Montana to ban sweepstakes casinos. The ban is set to take effect on October 1, 2025. Other states where sweepstakes casinos are currently unavailable for various reasons include Arizona, Washington, Idaho, New York, New Jersey, Nevada, Michigan, Delaware, Maryland, Montana, Utah, and West Virginia.
Governor Ned Lamont signed Senate Bill 1235 (SB 1235) into law back in June, officially putting an end to sweepstakes casinos in the Constitution State.
According to SB 1235, “no person shall conduct or promote a sweepstakes or a promotional drawing” or “facilitate participation in any real or simulated online casino gaming or sports wagering.” Violating the law could lead to a $5,000 fine and up to five years in prison.
There is one exception to the new rules. Grocery stores can still run sweepstakes, but the prizes are limited to discounts on store products instead of cash rewards.
Since it was signed into law, SB 1235 has faced pushback from groups opposing the crackdown on sweepstakes platforms.
Many sweepstakes casinos have also already pulled out of New York as the state steps up its crackdown efforts. The push has led several operators to leave the market entirely.
In May, VGW, the company behind popular platforms like Chumba Casino and LuckyLand Slots, told ReadWrite that it had informed players about its decision to start phasing out the platform. The company added that it planned to fully exit the New York market by the end of August.
The developments come as Senator Joseph Addabbo Jr.’s SB 5935 bill continues making its way through the New York legislature.
Why are states banning sweepstakes casinos?
Many states argue that sweepstakes casinos are really just another form of gambling, even if players are not directly wagering cash. Officials say these platforms have been flying under the radar and avoiding the kind of regulation traditional gambling faces.
In early July, Louisiana Attorney General Liz Murrill declared online sweepstakes casinos illegal in the state, despite Governor Landry saying otherwise. When asked by State Senator Rick Edmonds whether these platforms comply with Louisiana’s gaming laws, Murrill answered no.
She explained that sites using “Gold Coins” and “Sweepstakes Coins” are designed to mimic real gambling. By charging fees, keeping part of the funds, and offering cash prizes, they cross the line into illegal territory under Louisiana law. She also pointed out that Louisiana does not allow online casino gaming unless it is approved by legislation or a public vote.
“Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” said Attorney General James. “I thank the NYS Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.” https://t.co/NlFxT2eW4O
— Daniel Wallach (@WALLACHLEGAL) June 6, 2025
Murrill added that these sites are not like legitimate sweepstakes run by brands such as Marriott, which are temporary promotions. Instead, sweepstakes casinos operate year-round with the goal of making a profit.
New York officials have voiced similar concerns. Attorney General Letitia James warned, “Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances.” New York State Gaming Commission Chairman Brian O’Dwyer echoed this, describing them as “unscrupulous, unsecure, and unlawful.”
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