Why Are States Suddenly Turning Against Sweepstakes Casinos?

Indiana and Maine are the latest states to enact bans on sweepstakes casinos, and Oklahoma has also moved against this model. Why are the states suddenly taking umbrage against a model that has largely flown under the radar in the past? Are the states that are outlawing them doing so for the same reasons, or are their motivations different?

We wanted to better understand what is happening in the market and that the rules are clear, so we invited Casino.org’s Ian Zerefa to come and answer all our burning questions. As an industry expert at one of the most highly rated online casino review sites, we were confident that he would have all the answers for us – and he did!

Txktoday:

Hi Ian and welcome to Txktoday. Before we dive into questions on why some states are turning against sweepstakes casinos, could you please let us know what they are and how they are legal?

Ian Zerefa:

Thanks for inviting me in to talk about this. Sweepstakes casinos sit at a strange intersection of casino games and gambling, where their virtual dual money system allows them to operate outside of the confines of gambling laws. Well, it has, in most cases up until now. Unlike social casinos, which are played ‘for glory only’, sweepstakes casino wins can be converted into real prizes, including cash. 

In the US, for an activity to legally be classified as gambling, there has to be:

A prize

An element of chance in the obtaining of the prize

A real cost for entry

Sweepstakes casinos get around these strict requirements by operating under promotional rules. The ‘competitions’ have clear cut-off dates, and there are plenty of ways to play without making a purchase. In addition, they use a dual-currency system of Gold and Sweeps Coins. Gold Coins are non-cash redeemable, but by playing won Sweeps Coins through the games, winnings can be converted into cash. These real-money alternative casinos have proved incredibly popular, but there has been increasing doubt about their legality.

What changed in 2026?

I think the biggest change has been visibility. Sweepstakes casinos used to be pretty niche; however, the sector has grown significantly and is now larger than its real-money counterpart. It has grown at an astonishing rate and  there are now more than one million US-based players. 2025 revenue was estimated at $11.4 billion, with operators generating at least $4 billion in net revenue. 

As a result, the American Gaming Association (AGA) issued a warning claiming these operators are a threat to consumers. However, the bottom line is that they see them as a challenge to the integrity of the legal game. If people are playing at online sweepstakes casinos, they are possibly not playing on state-regulated sites. While some states have moved to outlaw online gambling for moral or financial reasons, others have done so to protect their own revenue streams. 

What this means (and for different reasons depending on the state) is that sweepstakes gambling is now more restricted and unavailable in some states including the likes of Maine, California and New York. While many of the bans have been brought in under the guise of ‘consumer protection’, Maine has done so to prevent it competing with its commercial market 

Does the dual-currency model still provide legal protection?

Yes, in the vast majority of states it does. While there have been efforts to ban sweepstakes casinos in some jurisdictions, they remain available and popular in most places.  

What should players watch for?

Well, somewhat sadly, the first thing players need to check is whether sweepstakes casinos are legal in their state, at Casino.org we only guide players to legal, properly run sites.  Players are looking for a fun, entertaining, and rewarding experience. We aim to help match players with what they are looking for. 

Great sites have a strong game library featuring titles from reputable, well-known game developers. They take security as seriously as any real-money operator would. They also offer a great selection of incentives and bonuses to allow players to play without making a purchase. With over 250 sites legally operating in the US right now, it does pay to be a bit discerning. 

Picking the right platform can make all the difference for your gaming experience. We recommend players look for sweeps platforms that have the following:

Active bonuses –  welcome bonuses, SC offers, and daily-login bonuses

Built-in safety features  – including using encryption,  having independent audits, and featuring responsible gaming tools

Transparent terms & conditions – you should be able to clearly see what you are playing for and if any restrictions apply.

Optimized mobile experience – sites should be optimized or have mobile apps for iOS and Android.

Verified payouts and redemptions – RTPs should always be verified, and redemption methods and times should be clearly stated.

While sweepstakes casinos might not be gambling in the strictest sense, they have so much in common with real-money sites that we always caution players to approach them with the same skepticism they would any gambling opportunity, and to remember that they are businesses created to make a profit. Treat them as you would any other entertainment events and acknowledge that there is a price to pay for being entertained.

Could federal regulation eventually become relevant?

Historically, federal regulation and real-money gambling do not go terribly well together, given PASPA’s attempts to outlaw sports betting and where that led. US States have the right to determine what happens within their borders when it comes to gambling, so any federal regulation will have to be a workaround to be accepted. 

However, this is what has happened with prediction markets like Kalshi and Polymarket, which are regulated under federal law. However, despite being even more akin to gambling than sweepstakes casinos, they are legally regulated as trading platforms.

When it comes to gambling regulated, the US is pretty convoluted. It is not one market but a patchwork of 50, each with its own priorities and interpretations. While I am not saying it will never happen, I am not sure how effective federal regulation might be. Inevitably, any federal regulation would be challenged by state lawmakers. In the meantime, industry operators would almost certainly just reinvent the model (as they have now with parimutuel casinos) to ensure that customers can get what they want – the chance to play casino games online! 

It shouldn’t be that complicated, but, unfortunately, it is. 

Thanks, Ian, that should have swept away any misunderstanding.