Chavdar Vasilev is a gambling news writer with several years of experience in the iGaming industry. He started creating promotional content but soon found he loved reporting on the industry itself. Since then, he’s delivered...
Read Full BioThe US sweepstakes casino market remains under threat as more states target the online gaming platforms.
New Jersey could become the fifth state to ban the platforms if Gov. Phil Murphy signs a recently passed bill into law. Meanwhile, a regulatory crackdown in Arizona and a dozen lawsuits in Alabama could force operators out of the two states.
Furthermore, a bill seeking to ban sweepstakes in California, the nation’s largest state, will have its first hearing next week.
NJ Could be The Fifth State to Ban The Sweepstakes Casinos
On Monday, June 30, the New Jersey Assembly voted 69-10-1 to ban sweepstakes casinos. A few hours later, the Senate passed A5447 by a similar margin, 34-5.
The bill defines illegal gambling as any game in which players pay for entries to win prizes, including online sweepstakes casinos. Exceptions for traditional sweepstakes apply, such as free contests and those with specific entrance and odds rules.
The bill was introduced in March and saw little movement until June. However, factors like an endorsement by the New Jersey Responsible Gaming Task Force and bans in other states have seen the proposal quickly move through the legislature this past month.
If Gov. Murphy signs A5447 into law, New Jersey will join Montana, Connecticut, New York, and Nevada in banning the platforms in the past two months.
Unlike the rest, Nevada doesn’t explicitly ban sweepstakes platforms. The recently passed bill, however, gives state gambling regulators more power to target and prosecute unlicensed out-of-state operators.
The Louisiana legislature also passed a ban bill. However, Gov. Jeff Landry vetoed it, stating it was unnecessary. Since then, the state has sent a cease-and-desist order to 40 offshore and sweepstakes operators, with approximately 20 having already left the state.
Meanwhile, ban bills in Maryland and Mississippi passed one chamber but failed in the other. In both states’ cases, the Senate advanced a ban, but it failed in the House.
Elsewhere, ban bills remain active in Ohio and California. The Ohio proposal has not made any progress, but the legislative session doesn’t end until the end of the year. Then, it carries on to 2026.
Meanwhile, the proposed legislation in California will have its first legislative hearing on July 8.
Arizona is Joining the Regulatory Crackdown
While some states have chosen a legislative path to pursue sweepstakes casinos, others have taken a regulatory approach through cease-and-desist orders.
Michigan successfully implemented the tactic in early 2024, and as a result, no notable sweepstakes casinos permit player registrations in the state. As mentioned, Louisiana’s recent crackdown has led to a mass exodus, and similar actions by the Delaware Division of Gaming Enforcement and the Maryland Lottery and Gaming Control Agency have proven successful.
On the same day that Louisiana issued the regulatory orders, the Mississippi Gaming Commission followed suit. However, the scope was much smaller and only a handful of operators have left.
Arizona is also ramping up its efforts. While it has targeted mostly offshore casinos in the past, in recent months, it has sent cease-and-desist letters to a few sweepstakes platforms.
In April, it ordered Modo.us and several offshore operators to cease operations, which Modo has complied with. Last week, the Arizona Department of Gaming sent another wave of similar orders, including to Stake.us and High 5 Casino.
The two have not yet complied, but given that the regulatory tactic is paying off in other states, Arizona could become the latest jurisdiction to see a growing number of sweepstakes casinos exit.
13 Active Lawsuits Against Sweepstakes Casinos in Alabama
Sweepstakes casinos face a different threat in Alabama, one of the strictest anti-gambling states. While others target the platforms with legislative bans or regulatory cease-and-desist letters, Alabama has 13 active lawsuits against sweepstakes casinos.
In May, an Alabama woman accused Stake.us of running an illegal gambling operation. Since then, a dozen other similar lawsuits have appeared in the state.
According to US gaming and sports betting attorney Daniel Wallach, eleven of those were filed in June alone. In addition to Stake, most major operators, including VGW and High 5, are being sued.
In most of these cases, the plaintiffs argue that sweepstakes casinos violate Alabama laws because they require payment in exchange for a chance to win, employ gaming-style mechanics, and, despite the availability of free play, involve real-money gaming.
Despite the lawsuits, most defendants, except Pulsz Casino and Pulsz Bingo, have not yet left Alabama. Still, the number of sweepstakes casinos now listing Alabama as an ineligible jurisdiction is growing:
- McLuck Casino and sister sites Hello Millions, Mega Bonanza, Jackpota, and SpinBlitz
- Play Fame
- Sidepot
- Spinfinite
- Spree
