Breaking Legal Updates
In 2025, a wave of regulatory actions has swept across the United States, targeting sweepstakes casinos in an effort to close legal loopholes and curb their operations.
Key Legislative Actions and Impact
The year began with Montana becoming the first state to pass a law explicitly banning sweepstakes casinos on May 12, 2025. This was followed by Connecticut's unanimous approval of SB 1235 on May 29, 2025, which criminalised online sweepstakes casinos and similar promotional gambling games.
The mounting legislative pressure has forced many operators to exit markets or face penalties. For instance, Montana has set an October 1, 2025 deadline for all sweepstakes casinos to cease operations, while Connecticut's aggressive legal actions include settlements and potential criminal penalties.
High 5 Entertainment, a game supplier, agreed to pay a $1.5 million settlement in Connecticut, illustrating the financial and legal risks operators and game suppliers face from state enforcement actions.
State-by-State Overview
States like Washington and Michigan have already banned sweepstakes casinos, with Michigan shutting down operators after investigations in 2023. Louisiana's House passed Senate Bill 181 with unanimous support, signaling broader legislative efforts. Florida, New York, Nevada, New Jersey, and Louisiana are actively considering legislation or have partial restrictions.
Impact on Companies
The sector sees a bifurcation between states with bans or heavy restrictions and over 40 states where sweepstakes casinos continue to operate with minimal oversight, creating an uneven U.S. market landscape.
Current Legislative Landscape
| State | Legislative Action | Date Signed/Passed | Effects | |-------------|------------------------------------------------|--------------------|--------------------------------------------------| | Montana | SB 555, bans sweepstakes casinos | May 12, 2025 | Must exit by Oct 1, felony penalties | | Connecticut| SB 1235, bans online sweepstakes casinos | June 11, 2025 | Criminal penalties, fines; enforcement actions | | Louisiana | Senate Bill 181 passed in House; ongoing debate| Mid-2025 | Potential sweeping restrictions | | Washington | Existing ban | Pre-2025 | Sweepstake casinos illegal | | Michigan | Investigation & shutdowns (e.g., 2023) | Pre-2025 | Sweepstake casinos ordered to cease | | Idaho | Existing law prohibits cash prizes | Pre-2025 | Sweepstakes allowed only with no cash prizes |
Recent Developments
Stake.us announced its departure from Arizona on July 18, 2025. More than 20 sweepstakes casinos have already left West Virginia, although no specific date has been provided. Funzpoints and Spree have ceased operations in New Jersey as of July 23, 2025.
California's anti-sweepstakes casino bill, AB 831, passed in the Senate Committee on Public Safety with a unanimous 6-0 vote on July 16, 2025.
These developments represent an intensifying regulatory crackdown on sweepstakes casinos aiming to close legal loopholes that have allowed these platforms to operate under "promotional" or "sweepstakes" models, which many states now deem as disguised gambling.
The landscape remains fragmented nationally, but increasing enforcement signals possible broader nationwide reforms in the near future.
sweepstakes casinos face penalties and closure in several states, as evident in Montana's ban on May 12, 2025, and Connecticut's criminalization of online sweepstakes casinos on May 29, 2025.
Operators are forced to exit markets due to the mounting legislative pressure, demonstrated by high-profile examples like High 5 Entertainment's $1.5 million settlement in Connecticut.
