Darkening Gray
Sweepstakes casinos once hung out in the legal gray areas of U.S. gaming. In 2025, that gray turned decidedly darker, and a growing number of states made it official.
From coast to coast, lawmakers and regulators transformed what had been cautious debate into real action: bans passed, letters flew, platforms pulled out, and penalties climbed. If you’ve been following social and sweepstakes gaming at all this year, you’ve seen the tectonic plates really start to shift.
Here’s a look at how the legal landscape changed: who acted, what actually passed, and what it means heading into 2026.
What Actually Got Signed Into Law
By year’s end, several states weren’t just threatening enforcement, they enacted bans.
New York and California took center stage.
In New York, Governor Kathy Hochul signed Senate Bill 5935-A, making online sweepstakes casinos illegal statewide. The law targets dual‑currency systems that mimic casino play and backs the ban with steep civil penalties, including six‑figure fines per violation, along with consequences for operators, vendors, payment processors, and affiliates. By the time the bill became law, months of pressure from the attorney general’s office had already pushed most major platforms out of the state, leaving little room for anyone to test the limits.
California followed with Assembly Bill 831, a bipartisan ban that passed overwhelmingly and goes into effect in early 2026. It’s a major setback for operators, given the enormous size of California’s market and how many platforms had counted on it for revenue.
Montana joined the list too, and that’s where things get especially serious. Its 2025 law bans dual‑currency sweepstakes prize models entirely, and individuals who knowingly violate the statute can face felony charges, with prison terms of up to 10 years, making it one of the harshest punishments in the country.
Add in other states like Connecticut, New Jersey, and Nevada, that passed similar language, and the legal map looks very different than it did this time last year.
Not Just Laws, Regulators Took Real Action Too
In places without new statutes, enforcement didn’t wait. Attorneys general and gaming boards turned up the heat with cease‑and‑desist orders that had real teeth.
Tennessee led the charge with the Attorney General’s office sending nearly 40 cease‑and‑desist letters to sweepstakes casinos this year, calling out operators for providing what officials said were unregulated gambling experiences. The message landed, and almost every operator that got a letter left the state.
Similar moves happened in states like Minnesota, Michigan, Arizona, and Louisiana, where regulators either issued warnings or orders that effectively forced platforms to either restrict access or shut down entirely.
These enforcement plays don’t come with the backing of new legislation, but the outcome is often the same: operators quietly exit rather than risk a legal fight.
What Passed, And What Didn’t
2025 saw a flurry of bills introduced across the country targeting sweepstakes casinos, but not all made it to the finish line.
Some states came tantalizingly close. Bills that would have banned or severely restricted sweepstakes gaming were discussed in legislative sessions in places like Florida, Mississippi, and Maryland, but ultimately stalled or died before votes were held.
In Louisiana, lawmakers passed an anti‑sweepstakes bill, only to have the governor veto it. But instead of ending the fight, the veto lit a fire under regulators. The state’s Gaming Control Board and attorney general quickly stepped in, using legal opinions and enforcement tools to force operators out anyway.
Texas tried and failed to move a ban out of committee, while other states kept proposals alive into 2026 but ran out of time before session deadlines.
These near‑misses matter because they show the issue isn’t going away, it’s just shifting shape.
The Patchwork Reality: Legal in Some Places, Banned in Others
One of the big takeaways from 2025 is that the U.S. now has a patchwork regulatory landscape for sweepstakes casinos:
- Some states banned sweepstakes casinos outright and are enforcing their bans with real consequences.
- Others rely on regulators to interpret existing gambling laws and shut operators down administratively.
- And then there are states where no action has been taken at all, leaving operators in a legal gray zone, at least for now.
- For players and operators alike, that means the rules can change dramatically just by crossing a border, or even from one year to the next.
Operators Are Responding — Sometimes by Leaving
With bans stacking up and enforcement ramping, operators didn’t wait around in 2025. A handful made clear moves:
- VGW, the company behind Chumba and LuckyLand, pulled out of multiple states before official bans even hit. Rather than risk getting caught in an enforcement crossfire, they got out ahead of it.
- A1 Development scaled back access in regions where regulators had sent cease‑and‑desist orders, focusing investment on states with clearer rules.
- Blazesoft, behind brands like Fortune Coins, quietly tweaked its in-game currency system in a few states and dialed back promotions. This is a sign that it’s watching the legal climate closely and trying to stay ahead of trouble.
Some smaller operators, especially those without legal teams or deep pockets, didn’t wait around for formal bans. They exited entire states quietly, choosing to play it safe rather than fight a losing battle. Others started hinting at changes: revising how their virtual coins work, or exploring ways to stay legal in states with new frameworks.
So if your go-to platform vanished this year, it wasn’t random. It was the legal landscape shifting, and operators making fast moves to stay afloat.
Looking Ahead: 2026 Is Poised to Be Even Bigger
If 2025 taught us anything, it’s that lawmakers are done treating sweepstakes casinos as fringe issues. They’re now a serious regulatory priority.
Legislators have already pre-filed bills for 2026 in states like Florida, Indiana, and Maine — many of which aim to either ban or tightly regulate sweepstakes gaming.
The momentum is real. Attorneys general are doubling down, gaming regulators aren’t letting up, and you get the sense they just can’t wait to take it further. Next year isn’t just shaping up to be busy. It could be a full-blown tipping point.
Whether that leads to a fully national patchwork of bans, a push for a federal framework, or some states choosing regulated licensing instead of prohibition, one thing’s certain: sweepstakes casinos are no longer a back‑page curiosity. They’re now front and center in the debate over how and where Americans should be able to play.
The Bottom Line
2025 was the year sweepstakes legislation moved from the sidelines to the headlines. The sweepstakes casino space won’t look the same a year from now.
With legal lines redrawn and more states stepping up, the question isn’t if change is coming, it’s how fast, and how far it’ll go.
For operators, regulators, and players alike, 2026 won’t be a wait-and-see year. It’ll be a make-a-move year.
Blaise Luis
