The end of sweepstakes casinos? A look back at 2025
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21 Dec 2025 •
Reading time: 3 minutes In 2025, one of the most controversial phenomena in iGaming, sweepstakes casinos, came under an unprecedented legal microscope. Largely tolerated for years thanks to legal grey areas, these online casinos have faced a wave of bans, regulatory actions and strategic moves that are redefining their future.
Regulators faced with a contested model
At the beginning of the year, several US state authorities began to express doubts about the legality and impact of this particular model of online gaming. Long regarded as promotional entertainment rather than gambling, the sweepstakes system caught the attention of legislators when it generated considerable revenues – almost $10 billion in 2024 according to a study by Eilers & Krejcik for the Social Gaming Leadership Alliance (SGLA).
But as earnings and usage increased, the line between promotion and illegal gambling blurred in the minds of regulators.
The states that host some of the country’s largest economies have taken decisive action. In New York, Senate Bill 5935 was signed into law, explicitly banning sweepstakes casinos, while the Attorney General has sent dozens of cease-and-desist letters to operators.
Shortly afterwards, in California, Assembly Bill 831 was passed unanimously by both houses of the state legislature. These texts aim to close a legal loophole that has long been exploited to offer casino-like games and sports betting without an official licence.
These regulatory actions are not isolated: similar bans have been passed in Connecticut, Montana and New Jersey, while others, such as Louisiana, have seen legislative attempts followed by vetoes or official warnings.
In addition to legislation, administrative tools were widely employed. More than a hundred cease-and-desist letters have been sent to operators in states such as Arizona, Michigan, Maryland and Mississippi. These notices order the closure of services deemed not to comply with local legislation.
In some cases, regulators believe that these platforms are exploiting an outdated legal window: the definition of sweepstakes, inherited from old laws, does not reflect the complexity of today’s digital operations.
Operators’ response: comply or withdraw
Faced with this regulatory pressure, the responses of industry players have been mixed. Unlike some who have opted for legal action, most of the major platforms have complied with the authorities’ demands, temporarily closing down services or withdrawing from certain markets.
One notable example is the decision by VGW, the major operator behind platforms such as Chumba Casino and LuckyLand Slots, to leave the Canadian market to concentrate its resources on the United States in the face of regulatory challenges.
Increased calls for regulation
While some legislators see sweepstakes casinos as a form of illegal gambling in disguise, the industry insists on the need for a specific legal framework. According to proponents of regulation, a regulated model could generate substantial tax revenues for the States, while offering players a transparent and legal experience.
An SGLA study estimated that Florida alone would account for more than $1 billion in revenues for operators in 2025, and that the introduction of a 6% tax on these purchases could bring in some $63 million for the state.
As 2025 draws to a close, legislators show no sign of letting up. Similar bills have been introduced in Indiana, Maine and Oklahoma, while other states are preparing to strengthen or adjust their positions.