America’s fight over sweepstakes casinos has opened a new front in the long-running battle over who gets to control gambling: state regulators, licensed casino operators, or companies that say they are running promotional games rather than betting sites.
Some states have already moved to shut the sector down. Others are relying on existing gambling laws. A third group has yet to take firm action, leaving operators to chase customers in legal grey areas.
The American Gaming Association (AGA), which represents the regulated casino industry, has cast the issue as one of the sharpest threats facing the US gambling market.
A patchwork of state responses
The clearest line has been drawn in five states. According to the AGA, five states (California, Connecticut, Montana, New Jersey and New York) passed new legislation in 2025 to “explicitly prohibit sweepstakes gaming platforms that mimic online casinos or sportsbooks.”
Other states have not waited for new laws. Arizona and Louisiana, the AGA said, were among those that “took enforcement measures against sweepstakes based on pre-existing laws.” In Louisiana, regulators and the attorney general’s office treated the issue as already covered by gambling statutes. In Arizona, the Department of Gaming sent cease-and-desist orders to several sweepstakes casinos platforms, accusing them of illegal gambling.
Delaware followed a similar path. Its Division of Gaming Enforcement said an investigation found one sweepstakes operator had “misrepresented its services as promotional sweepstakes while enabling players to purchase coins for casino-style games, leading to potential cash winnings.”
Maryland also pursued enforcement, sending cease-and-desist orders to operators of unauthorised sweepstakes platforms, while a bill to confirm that casino-style sweepstakes were illegal passed the state Senate but failed to advance in the House.
But the crackdown has not been universally welcomed. In California, for instance, opposition to a proposed sweepstakes ban also came from smaller tribal interests, who argued that the legislation risked protecting established gambling operators while closing off newer digital opportunities. Big Lagoon Rancheria warned that a ban would “eliminate business opportunities for various tribes by locking them out of emerging digital business sectors, without offering any offsetting benefits. This will impact tribes that do not have the geographic benefit of being able to operate large gaming casinos.”
Ads follow the gaps
The advertising data helps explain why the fight has intensified. In a separate AGA advertising report, data showed that “Half of all the online ads for online casinos that consumers are exposed to are for offshore or sweepstakes casinos.”
The same report said offshore and sweepstakes operators “target consumers in states without sweeps enforcement or prohibition actions.”
The AGA’s July 2025 consumer research also challenged the industry’s central defence that these products are not gambling. It found that 90% of sweepstakes casino users considered the activity to be gambling, while 68% said their main reason for playing was to win real money.
For licensed casinos, the issue is also economic. Regulated commercial gaming generated $78.6bn in gross gaming revenue in 2025 and $17.9bn in gaming tax revenue for state and local governments. Sweepstakes sites, iGaming operators argue, sit outside the licensing, tax and responsible gambling systems that states built around casinos, sports betting and iGaming.
