In 2025, U.S. states intensified their actions against sweepstakes casinos, marking a significant shift in the regulation of online gambling platforms. Legislators and regulators targeted dual-currency websites, which mimic traditional casinos and sportsbooks by offering “gold coins” and “sweeps coins” redeemable for cash or prizes, arguing that these platforms exploit legal loopholes to operate outside standard gambling laws.
Expanding legislative restrictions
New York and California emerged as leaders in the crackdown. Governor Kathy Hochul signed Senate Bill 5935, banning sweepstakes casinos after Attorney General Letitia James sent cease-and-desist letters to 26 operators. Analysts estimate that New York accounted for $762 million in sweepstakes sales in 2024. California followed with Assembly Bill 831, passed unanimously, targeting platforms responsible for roughly 20% of industry revenue.
Other states, including Connecticut, Montana, and New Jersey, passed similar bans. Louisiana lawmakers approved a sweepstakes ban, but Governor Jeff Landry vetoed the legislation, citing the authority of existing regulatory bodies.
Nevertheless, the Louisiana Gaming Control Board issued 40 cease-and-desist letters to unregulated operators. Regulators in Arizona, Michigan, Mississippi, and Maryland also took enforcement action, sending more than 100 letters collectively to sweepstakes platforms in 2025.
West Virginia Delegate Shawn Fluharty, president of the National Council of Legislators from Gaming States, said, “Rarely do we agree on anything as lawmakers, but on this issue, we agree that this represents illegal gambling operations.” He emphasized the consensus among legislators regarding the need to protect consumers and maintain legal and economic integrity.
Industry response and calls for oversight
Sweepstakes operators largely complied with state enforcement while advocating for formal regulation. Jeff Duncan, executive director of the Social Gaming Leadership Alliance, stressed that sweepstakes laws have existed for over 70 years but need modernization to reflect digital platforms. “We want to be regulated. We want to pay taxes,” Duncan said. He argued that a regulated framework could provide states with revenue while distinguishing sweepstakes from traditional gambling, where players risk their own money.
Some experts questioned whether these regulatory efforts were timely. Dan Hartman, senior advisor at GMA Consulting, highlighted the costs of obtaining proper licenses, noting that the industry’s attempts to seek regulation may come too late. Fluharty added, “Redeemability to real money is the real issue. It is illegal gambling if it’s $30 in coins and it’s 30 coins.”
Preparing for 2026 legislation
As attention remains on sweepstakes casinos, new bills are being introduced for the 2026 legislative session. Florida Rep. Berny Jacques filedHouse Bill 591, making internet gambling a third-degree felony and aiming to protect the Seminole tribe’s monopoly. Maine Senator Craig Hickman introduced LD 2007 to outlaw sweepstakes platforms, while Indiana Rep. Ethan Manning proposed House Bill 1052, defining sweepstakes operations and establishing civil and criminal penalties.
The Social Gaming Leadership Alliance estimates that Florida accounted for more than $1 billion in sweepstakes revenue in 2025 and suggested that a 6% tax could create $63 million in additional state revenue.
With states pursuing both bans and enforcement actions, 2025 marked a turning point in U.S. sweepstakes regulation. The combination of legislative action, cease-and-desist letters, and industry advocacy for formal oversight sets the stage for continued scrutiny and stricter control in 2026.
Source:
“How 2025 became the year US states turned against sweepstakes casinos”, igamingbusiness.com, December 16, 2025
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