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Cases8 min read

Sweepstakes casino bans: what operators and affiliates faced

At least eight US states passed laws against online sweepstakes casinos between May 2025 and May 2026. The bills, the letters, an $8 million settlement and the clauses that name affiliates.

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As of October 2026, at least eight US states had passed a sweepstakes casino ban or an equivalent law, starting in mid-2025. In New York, 26 platforms agreed to stop selling sweeps coins after attorney general letters, and VGW later paid $8 million. California's, New York's and Louisiana's laws also name media affiliates.

Results at a glance

Figures come from statutes, legislative records and regulator releases unless a row says otherwise. Rules checked and last updated October 30, 2026.

MetricValueNote
States with laws aimed at online sweepstakes casinos (our count)8: Montana, Connecticut, New Jersey, California, New York, Indiana, Maine, LouisianaNot complete; Montana and Indiana dates reported by trade press, not independently verified
PeriodMay 2025 (Montana signed) to May 15, 2026 (Louisiana signed)Last law in force August 1, 2026 (Louisiana)
New York letters26 platforms agreed to end sweeps coin sales in New YorkNY Attorney General, June 6, 2025
Regulator settlement announced$8 million from VGW (Chumba Casino, Global Poker, Luckyland Slots)NY Attorney General, September 9, 2026; the only regulator settlement we checked
California penalty, operators and media affiliatesMisdemeanor: $1,000 to $25,000 fine, up to one year in county jail, or bothAB 831, Penal Code 337o
Louisiana penalty, promoters and media affiliatesFine up to $20,000, up to five years' imprisonment, or both; each promotion a separate violationHB 883, Act 182 of 2026

Context

A sweepstakes casino sells play coins (usually Gold Coins) and gives away a second coin, usually Sweeps Coins, that can be redeemed for cash prizes. The statutes call this a dual-currency system. Our explainer on sweepstakes vs social casinos covers the mechanics.

Gambling needs prize, chance and consideration. Operators argued that because Sweeps Coins are always available free, no one pays for a chance to win, so the games are promotions, not gambling.

States answered with statutes aimed at dual-currency games, with cease-and-desist letters, or both. For operators the result was the same: stop serving the state or face enforcement. Licensed online casinos work under a state license; see our guide to online gambling licenses.

What states did: sweepstakes casino ban by state

Eight states passed laws between May 2025 and May 2026, and the last of them took effect on August 1, 2026. For where licensed iGaming is legal, see is online gambling legal in the US.

Montana and Connecticut

Montana's SB 555 was signed in May 2025, as reported by Legal Sports Report (not independently verified). It does not name sweepstakes; it covers platforms that take bets and pay out in any form of currency.

Connecticut's Public Act 25-112 took effect on October 1, 2025. It bars anyone without an online casino or sports wagering license from conducting or promoting a sweepstakes that allows real or simulated online casino gaming. A violation is a class A misdemeanor and an unfair trade practice.

New Jersey

A5447, chaptered as P.L. 2025, c. 128, was signed on August 15, 2025 and took effect immediately. Legal Sports Report described it as a ban on online sweepstakes casinos; we could not retrieve the act's text, so its penalties are not summarised.

California sweepstakes casino ban

AB 831 (Chapter 623 of 2025) was signed on October 11, 2025 and has been in force since January 1, 2026. It added Section 337o to the Penal Code. The law defines an online sweepstakes game as a dual-currency game that simulates gambling and awards cash or cash equivalents. Coins handed out through a bonus, a promotion or "with the purchase of a related product" count as indirect consideration, which removes the free-coin defence. Card rooms licensed under the Gambling Control Act and the State Lottery fall outside the section.

New York sweepstakes casino ban

S5935A (Chapter 605 of 2025) was signed on December 5, 2025 and took effect immediately. The State Gaming Commission decides what counts as a dual-currency system. The law also reaches payment processors, geolocation providers, game suppliers and media affiliates.

Indiana, Maine and Louisiana

  • Indiana: HB 1052 was signed on March 13, 2026, with the ban in force from July 1, 2026, as reported by SBC Americas (not independently verified).

  • Maine: LD 2007 (Public Law ch. 645) was signed on April 6, 2026 and took effect on July 29, 2026.

  • Louisiana: HB 883 was signed on May 15, 2026 as Act 182 and took effect on August 1, 2026. It treats dual-currency games that simulate gambling as gambling by computer. It also reaches anyone who knowingly supports or facilitates promotion in the state, naming promoters, endorsers and media affiliates, with fines up to $20,000, up to five years' imprisonment, or both, and forfeiture of profits.

The list is not complete, and pending bills in other states are not counted here. Bills move every session, so check the state regulator before relying on it.

Results

What happened to operators

New York acted before its statute. On June 6, 2025, Attorney General Letitia James sent cease-and-desist letters to the operators of 26 platforms, and all 26 agreed to stop selling sweepstakes coins in the state. Her office said betting redeemable coins on games of chance "constitutes gambling, regardless of how the casino operator characterizes" them.

Leaving did not close the file. On September 9, 2026, the office announced that VGW, which runs Chumba Casino, Global Poker and Luckyland Slots, would pay $8 million in disgorgement, penalties and costs. The office said it had sent VGW a cease-and-desist letter in June 2025 and that the company then stopped offering the games in New York.

Regulators elsewhere sent letters too. The Arizona Department of Gaming ordered sweepstakes operators, Stake.us among them, to stop operating in the state (the release is undated). The Michigan Gaming Control Board issued orders to 45 offshore operators on April 7, 2026 and 33 letters on October 8, 2026; the October release lists sweepstakes-style games among the products.

What happened to affiliates

The new laws reach affiliates directly. California makes it a misdemeanor for a "media affiliate" to knowingly and willfully support, directly or indirectly, the promotion of an online sweepstakes game in the state. New York bars media affiliates from supporting it, with per-violation fines and possible loss of, or ineligibility for, a state gaming license. Louisiana names promoters, endorsers and media affiliates and counts each promotion as a separate violation. Connecticut does not use the word affiliate, but its law bars unlicensed parties from conducting or promoting these sweepstakes.

Operators that exclude a state generally stop paying on players there, according to typical program terms; check each program's terms. Ad platforms were already strict: Meta requires its authorization for sweepstakes ads, including affiliate landing pages, and Reddit takes them only from pre-approved advertisers. Our Robux casinos case shows how a federal court treated a related virtual-currency model.

What did not work

  • The free-entry defence. California's law and New York's attorney general rejected it; California counts free and bundled coins as consideration.

  • Exiting as a fix for past conduct. In New York, VGW's $8 million settlement came 15 months after the June 2025 letter that ended its coin sales there. Per the attorney general, the payment covers conduct before the exit.

  • Relying on an operator's own state exclusion. New York needed no statute in June 2025, and Arizona's and Michigan's regulators sent letters (see above).

  • One-state, one-vertical income. When an operator stops serving a state, the revenue from that state typically stops with it. We have no published figure for affiliate losses.

Takeaways for affiliates

  • Keep a dated list of excluded states for every program and update it when an operator announces an exit.

  • Exclude banned states in targeting and copy, not only in the program's terms. The California, New York and Louisiana clauses cover promotion, not only operation.

  • Read the affiliate clause of each state law you earn from. California requires "knowingly and willfully"; New York and Louisiana count each violation or promotion separately.

  • Ask for written terms on state exits: what happens to RevShare from players in a state the operator leaves. Our guide to CPA vs RevShare vs Hybrid covers how to compare offers.

  • Track bills in every state that sends you revenue. Eight states passed laws in about a year, so avoid relying on one vertical or one state.

  • Keep disclosure and responsible-play wording on every page, and never imply cash gambling.

This summarises public statutes and regulator releases. It is not legal advice.

FAQ

Where are sweepstakes casinos illegal?

Sweepstakes casinos face state laws in at least eight states as of October 2026: Montana, Connecticut, New Jersey, California, New York, Indiana, Maine and Louisiana (Montana and Indiana per trade press). Regulators in Arizona and Michigan also sent cease-and-desist letters. The list is not complete; check your state regulator.

Are sweepstakes considered gambling?

Whether sweepstakes casinos count as gambling depends on the state. Operators argue that free entry removes consideration. California's AB 831 and New York's attorney general rejected that view, and other states apply their general gambling laws.

Is the California sweepstakes casino ban in effect?

The California sweepstakes casino ban has been in force since January 1, 2026. AB 831 makes offering, or knowingly supporting, an online dual-currency sweepstakes game in California a misdemeanor, with fines of $1,000 to $25,000 and up to a year in jail.

Are affiliates liable under the sweepstakes casino bans?

Affiliates can be liable in California, New York and Louisiana, where the laws name media affiliates; Connecticut's law covers anyone promoting an unlicensed sweepstakes. New York sets fines of $10,000 to $100,000 per violation; Louisiana up to $20,000 and five years' imprisonment. This is not legal advice.

Sources

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