Law Update

In a rapidly evolving landscape, sweepstakes casinos are facing mounting legal challenges and bans in several U.S. states. The recent legislative actions and regulatory measures taken in 2025 have significantly impacted the industry, with states like Connecticut, Idaho, Louisiana, Michigan, Montana, Nevada, New Jersey, New York, and Washington either banning sweepstakes casinos outright or taking active steps to restrict their presence.

For instance, New Jersey enacted a statewide ban at the end of June 2025, while New York's Attorney General declared sweepstakes casinos illegal in the same month. Washington explicitly banned such operations, and other states are following suit. Arizona, Pennsylvania, Florida, Maryland, and Delaware have taken regulatory steps such as cease-and-desist orders or legislative bills targeting sweepstakes casinos and their operators.

The legal scrutiny has intensified throughout the year, with multiple states introducing legislation to close loopholes that sweepstakes casinos rely on to operate without being classified as gambling, and increasing penalties for operators and affiliates. Some operators have voluntarily restricted access in states where bans or legislative reviews are underway, such as Connecticut.

Despite the challenges, sweepstakes casinos continue to operate legally in most parts of the U.S., serving a broad audience through virtual currency models that place them outside traditional gambling classifications. However, the legal environment remains dynamic and evolving, with a growing number of states moving to restrict or ban sweepstakes casinos.

Notable operators like BetMGM's CEO have spoken out regarding the issue, while others are facing potential legal action. For example, an Illinois resident is exploring the possibility of filing a class-action lawsuit against the parent company of WOW Vegas. Similarly, MyPrize.us sweepstakes casino is leaving New Jersey, and four social casinos have pulled out of California. Zula Casino has left sweepstakes games behind in five states: Delaware, Connecticut, Montana, Nevada, and New Jersey.

As the landscape continues to change, it is clear that the future of sweepstakes casinos in the U.S. is uncertain. While the industry continues to serve a substantial audience, the increasing legal challenges and bans in various states suggest a potential shift in the regulatory environment.

[1] Source: Legal Analysis of Sweepstakes Casinos in the U.S. [2] Source: Regulatory Actions Against Sweepstakes Casinos in 2025 [3] Source: Virtual Currency Models in Sweepstakes Casinos [4] Source: State-by-State Status of Sweepstakes Casinos in the U.S.

The dynamic and evolving legal environment in the United States is causing major concerns for sweepstakes casinos, leading to bans and restrictions in several states such as New Jersey, New York, and Washington.
In light of increasing legal challenges, some notable operators like BetMGM are speaking out on the issue, while others are facing potential legal action, such as the Illinois resident considering a class-action lawsuit against the parent company of WOW Vegas.
Despite the challenges, sweepstakes casinos continue to offer a broad audience access to their services through virtual currency models, yet these operations remain under intense scrutiny, with legislative actions and regulatory measures ongoing in multiple states.