Indiana Bans Sweepstakes Casinos, While Bans Fail in Four States

The legal landscape for sweepstakes casinos is in constant flux, with several states considering bans on the activity. Earlier this month, Indiana became the first state in 2026 to ban sweepstakes casinos. Operators will have until July 1st to exit the state or face steep civil penalties.

Not all is doom and gloom, though. Efforts to ban sweepstakes casinos have failed or stalled in multiple states. A bill to legalize iGaming and ban sweeps casinos has been pushed to 2027 in Virginia. Similar measures in Hawaii and Massachusetts have also failed.

Indiana First State in 2026 to Ban Sweepstakes Casinos – Sweepstakes Poker Still Legal

Indiana became the latest state to ban sweepstakes casinos when Gov. Mike Braun signed HB1052 into law. It becomes the eighth state to either enact a sweepstakes ban or rule that existing state law prohibits the activity.

The bill had overwhelming support in both chambers of the state legislature and passed by a wide margin. Operators will have until July 1, 2026, to withdraw from the state. Afterward, the Indiana Gaming Commission can impose civil penalties of $100,000 per violation against any sweeps casinos that continue to operate in the state.

An interesting exception in the bill pertains to “peer-to-peer skill-based poker games.” This will permit sweepstakes poker rooms like ClubWPT Gold and Global Poker to continue operating in the state.

There are over 30 sweepstakes casinos estimated to have offered services in the Hoosier State prior to the ban, including Stake.us and Pulsz. Operators must withdraw from the state, leaving players scrambling to withdraw their balances before the July 1st deadline.

Indiana will be the second state to see a ban take effect in 2026, after California activated its ban on January 1st.

How Will the Indiana Ban Impact the Industry?

Indiana became the first state to ban sweepstakes casinos in 2026, but it may not be the last. Maryland has advanced legislation looking to ban sweepstakes casinos and has put increased pressure on casinos to exit the state. 

States pursuing a ban are targeting the dual-currency systems used by social sites where players can buy gold coins and receive sweeps coins as a bonus. Sweeps coins can be exchanged for real cash or prizes. States pursuing a ban argue that this constitutes backdoor gambling.

Indiana's decision to close its doors to sweepstakes casinos will reduce market share for companies already struggling to compete in a crowded market. Multiple casinos have shut down in recent months, including OnPoint and LuckyStars. 

Players at the remaining sweeps casinos are beginning to see the results of market pressure. Many players are complaining about reduced player rewards, slower redemptions, and the removal of games as software developers like Pragmatic Play opt to leave the sweepstakes industry.

One positive trend emerging from the campaign against sweepstakes casinos is that states are also pursuing iGaming regulation alongside a sweeps ban. This will bring greater regulatory clarity to those states and drive continued expansion of legal online gambling in the United States.

Several Sweepstakes Bills Stall or Delayed to 2027

While Indiana’s ban is a blow to the industry, three states have opted not to pursue action at this time. Bills in Virginia, Hawaii, and Massachusetts have all failed for 2026, giving players at least a one-year reprieve. However, Minnesota lawmakers have taken aim at the industry, introducing legislation to ban sweeps casinos.

Virginia iGaming Delayed Until 2027 – A bill that would have led to iGaming regulation and a ban on sweepstakes casinos has stalled in committee. HB 161 and its sister bill, SB 118, had both passed in their respective chambers, but neither side could reach a consensus. Both bills had substantially different allocations of tax revenue, which led them to stall during a conference committee meeting to discuss them. This is great news for sweepstakes casinos as the measure included a ban on the industry. The matter will likely be revisited in 2027, but for now, sweeps players can continue playing at their favorite casinos.

Hawaii Defers Bill That Could Target Sweepstakes Casinos – The House Committee on Judiciary & Hawaiian Affairs deferred Senate Bill 3281 earlier this month. The State Senate had passed the bill earlier this month with the intent to target illegal gambling devices. However, a clause in the bill targets “sweepstakes gambling machines,” which could have given the state the power to go after online sweepstakes casinos. Committee Chair David Tarnas recommended that a new bill be submitted in 2027.

Massachusetts Delays iGaming Bill to 2027 – the MA Joint Committee on Economic Development and Emerging Technologies sent House Bill 4431 to study earlier this month. The bill would have legalized online casinos and banned sweepstakes casinos. Retail casinos and responsible gambling advocates have mounted significant resistance to the bill. Efforts to legalize iGaming appear to be a long shot for the immediate future, meaning that if lawmakers still want to ban sweepstakes casinos, they may have to file a standalone bill in 2027.

Minnesota Introduces Bill Targeting Sweepstakes Casinos – SF 4474 aims to close gaming loopholes in state law by banning sweepstakes casinos and the dual-currency systems that allow them to circumvent many state laws. Online casinos are not legal in the Gopher State, so the banning of sweepstakes casinos will eliminate most of the state's online gambling options. The bill comes after MN Attorney General Keith Ellison sent cease-and-desist letters to several operators last year. The MN legislative session runs until May 18, giving lawmakers ample time to consider the measure.

Regulatory Pressures May Make For a Rough Road Ahead for Sweepstakes Players

The sweepstakes casino industry is rapidly evolving. Expansion and regulation are occurring simultaneously, creating confusion and frustration for players. While states like Indiana have succeeded in driving out sweepstakes casinos, other states like Virginia remain open to players. 

The road ahead will be rocky as states continue their attempts to push sweepstakes casinos out. However, it may lead to greater nationwide expansion of legal online gambling as states seek to close loopholes and clarify gambling regulations.