Are sweepstakes casinos legal? A state-by-state guide

Are sweepstakes casinos legal?

It depends on the state, and the list of states where they can operate is shrinking. A sweepstakes casino is a website or app that offers slot- and table-style games played with virtual coins and argues that a “no purchase necessary” sweepstakes model keeps it outside gambling law. As of September 30, 2026, 12 states have enacted laws against them, and regulators or attorneys general in many others have sent cease-and-desist letters or sued.

No state licenses sweepstakes casinos, and we don’t rank them. Our ranking of the best US online casinos only includes casinos licensed by a state gaming regulator, which are legal in seven states; see where online casinos are legal.

How sweepstakes casinos work

Sweepstakes casinos use two currencies:

• Gold Coins are play money. You can buy them in packages, but they have no cash value and can’t be redeemed.
• Sweeps Coins can be redeemed for prizes. You typically receive them as a free bonus when you buy Gold Coins, or through a free “alternative method of entry.” Stake calls its version “Stake Cash.”

According to the Los Angeles City Attorney, Stake Cash “can be redeemed for cryptocurrency or digital gift cards on a 1 SC to $1 basis.”

The model leans on sweepstakes law. Gambling generally requires a prize, chance and consideration (something you pay), and operators argue that free play removes the consideration. Arizona’s Department of Gaming says a lawful free-entry sweepstakes must let free players take part “in the same manner, to the same extent, and with the same odds of winning” as paying players.

A true social casino is different: it sells coins for games with no prize at all. The industry’s trade group, the Social Gaming Leadership Alliance (SGLA), now calls the sweepstakes model “Social Plus” and puts the difference simply: “you can actually win a prize.”

Why regulators say it’s gambling

Operators and regulators read the same model very differently. The SGLA says: “This is not gambling—it’s marketing.” Mississippi’s Gaming Commission says: “While some games might be advertised as free to play, if there is an opportunity for the player to provide consideration and win something of value, and an element of chance exists … it is gaming.” Florida’s attorney general put it this way: “If it looks like a casino, takes real money like a casino, and pays out like a casino, it is a casino.”

The practical difference from a licensed casino is oversight. Sweepstakes casinos hold no state gaming license, so no state tests their games, protects player balances, requires responsible gambling tools, enforces identity checks or resolves disputes. New York’s attorney general said in September 2026 that because sweepstakes casinos are “not subject to audits and other regulatory oversight,” players can’t know “whether a sweepstakes casino’s games are rigged, whether it will be able to cover a winning bet.”

The 12 states that passed laws in 2025–26

Twelve states enacted laws against sweepstakes casinos in 2025 and 2026, six each year, based on legislative records and Casino Reports’ tracking. Not all of them are outright bans.

• Some dates are uncertain. Sources disagree on when Montana and Connecticut signed their laws. We couldn’t confirm Nevada’s signing date, the effective dates in New Jersey and Tennessee or the day Louisiana’s bills were signed, and reports differ on Louisiana’s maximum fine ($40,000 or $100,000).
• Oklahoma’s ban takes effect November 1, 2026. Gov. Stitt vetoed it, saying it was “so broad that it criminalizes everyday apps,” and lawmakers overrode the veto.

Enforcement actions and lawsuits

Attorneys general and regulators have also gone after operators:

• Florida, August 19, 2026. Attorney General James Uthmeier sued Stake and VGW’s Chumba, LuckyLand and Global Poker brands, “and the payment processors that enable them,” seeking injunctions, recovery of player losses and penalties. In September he told Google, Meta, Reddit, Snap and TikTok to stop running sweepstakes casino ads in Florida by October 23, 2026.
• New York, September 9, 2026. VGW paid $8 million in disgorgement, penalties and costs to New York Attorney General Letitia James. After her office and the State Gaming Commission sent cease-and-desist letters to 26 sweepstakes casinos in June 2025, all 26 stopped selling sweeps coins in the state.
• Louisiana, 2025. The Department of Revenue sued VGW and WOW Vegas for a combined $44.4 million in taxes, interest and penalties.
• Los Angeles, August 28, 2025. The city attorney sued Stake.us, its suppliers (including 10 Evolution entities) and the streaming platform Kick; Stake.us left California soon afterward.
• Cease-and-desist letters. Tennessee’s attorney general sent nearly 40 in December 2025, calling the model “an illegal lottery,” and every recipient disabled the features or agreed to wind down. Illinois posted 65 letters dated February 4, 2026, Pennsylvania’s Gaming Control Board sent letters to 18 operators, and Michigan, Maryland, Mississippi and Delaware have acted too.
• Private lawsuits have had mixed results. Class actions against VGW have often been dismissed because of arbitration clauses, and we found no appellate ruling on whether dual-currency sweepstakes are legal.

Operators pulling out

Legal pressure has pushed operators out of many states, and in one case out of the country.

• VGW, which runs Chumba, LuckyLand Slots and Global Poker, had pulled out of or scaled back sweepstakes play in “at least 11 US states” by August 2025. LuckyLand Slots, then available in 44 states, exited the US effective September 14, 2026.
• Stake.us left California after the Los Angeles lawsuit, and “many of those suppliers exited the market with Stake,” iGaming Business reported. California’s ban “compelled the major suppliers and operators to drop out,” according to CDC Gaming.
• Workarounds have appeared: after California’s ban, operators “switched to a tri-currency model,” according to Victor Rocha, conference chair of the Indian Gaming Association.

Where the industry and its critics stand

The sweepstakes industry wants to be regulated and taxed; the licensed casino industry wants sweepstakes casinos banned.

• The SGLA, whose members include VGW and PLAYSTUDIOS, is led by former US Rep. Jeff Duncan, who says: “We want to be regulated. We want to pay taxes.” It has claimed regulation could raise about $20 million a year in Indiana, but regulators have reportedly shown “no interest” in licensing sweepstakes casinos.
• The American Gaming Association (AGA), which represents the licensed casino industry, backs state bans and enforcement; its Tres York has called the model “a too-clever-by-half attempt to offer online casino gateways to the public.” Its July 2025 research found that 90% of sweepstakes users consider it gambling and 68% say their main reason to play is to win real money.
• Bills point both ways. New Jersey’s S1500, which would license sweepstakes casinos, was still in committee as of April 2026; Washington, DC’s B26-0656, which would legalize online casinos and ban sweepstakes, was pending as of September 30, 2026.

What it means for players

If you use a sweepstakes casino, you’re relying on the operator alone:

• No regulator to call. Maine’s Gambling Control Unit, for example, has said it “cannot provide assistance or intervention in cases of disputes regarding winnings.”
• Redemption terms vary. A 2024 Connecticut class action alleged limits such as one redemption request per day, long approval times and high minimum thresholds. Read the redemption rules before you buy coins.
• Age limits may be lower. Licensed online casinos require you to be 21; sweepstakes sites set their own minimums, and some accept players from 18.
• Prizes are taxable. The IRS says gambling winnings are fully taxable even without a Form W-2G, and Form 1099-MISC reports prizes and awards, with a $2,000 threshold from 2026. See our gambling tax guide.
• Safety tools aren’t required. Licensed casinos in states such as New Jersey, Pennsylvania, Michigan and West Virginia must offer deposit limits, time-outs and self-exclusion, and New York’s Gaming Commission lists self-exclusion and cool-off tools as features of regulated play. If gambling is becoming a problem, see our responsible gambling guide or call or text 1-800-MY-RESET (1-800-697-3738).

The bottom line

The legal room for sweepstakes casinos narrowed sharply in 2025–26, with 12 new state laws and major lawsuits and settlements. Wherever you live, they aren’t licensed, so you don’t get a regulator’s protection. If you’re 21 or older and in a state with licensed online casinos, compare regulated options in our US online casino rankings, and learn how to spot a safe, licensed casino.