For the second consecutive year, sweepstakes casinos took center stage at the National Council of Legislators from Gaming States Winter Meeting, reflecting how sharply the regulatory environment has shifted since the group last convened. In the span of a year, lawmakers and regulators in multiple states moved from debate to direct action, leaving operators facing bans, cease-and-desist orders, and an uncertain path forward.
Six states have now passed laws that either directly or indirectly block the dual-currency model used by sweepstakes casinos, including California and New York. Roughly a dozen other jurisdictions issued enforcement letters demanding operators halt activity. Together, California and New York represented the most lucrative markets, and their closures reshaped the industry’s outlook heading into 2026.
Operators push for regulation, not resistance
Industry representatives used a Thursday panel in San Juan, Puerto Rico, to argue that sweepstakes casinos want to work within state systems. Jeff Duncan, executive director of the Social Gaming Leadership Alliance, told lawmakers, “We want to be regulated, we want to pay taxes.” He added, “We’re advocating for a modernized regulatory framework that reflects social games’ role as a safe and growing component of an interactive entertainment industry. We want you to go after the bad actors.”
Duncan compared the Gold Coins used by sweepstakes platforms to promotional games long accepted by consumers, including McDonald’s Monopoly and Publishers Clearing House. He said sweepstakes laws exist but have not kept pace with digital products.
Operators such as VGW and ARB Interactive have been regular participants in state hearings, arguing that their products differ from real-money gambling and could generate tax revenue if states chose to regulate them.
Lawmakers see illegal gambling in disguise
Opposition voices at the meeting remained unconvinced. West Virginia Delegate and NCLGS President Shawn Fluharty rejected the “social plus” framing and warned of revenue and consumer risks. “This is illegal gambling. That’s the whole argument,” he said. “Social plus is a great pivot and politicking, but not great policy.”
Fluharty pointed to the redeemability of Sweeps Coins as the core issue. “If you buy $30 sweeps coins for 30 coins, that’s a redeemability issue. It’s hard to argue you’re separate from an iGaming model,” he said. He later summarized the prevailing view among regulators: “If it walks like and talks like a duck – it’s a duck. States look at this as illegal gambling.”
Five states — Montana, Washington, Idaho, Connecticut, and New Jersey — have already banned sweepstakes casinos outright, citing consumer protection gaps and competition with licensed operators. Other states, including Florida, Maine, and Indiana, are considering similar bills ahead of 2026.
Long-term strategy and lingering skepticism
ARB Interactive general counsel Bryan Schroeder said compliant operators follow state orders, while others do not. “Our experience is, when we are prohibited in a state or we’re asked to leave, the good operators follow these rules, the bad operators stay,” he said. Schroeder emphasized new safeguards, including age verification, KYC, and geolocation tools, and said ARB is transitioning to GeoComply’s IDComply.
Source:
“Sweepstakes operators get seat at NCLGS table after tough year”, sbcamericas.com, December 12, 2025
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