Which States Could Ban Sweepstakes Casinos Next?

Sweepstakes casinos saw tremendous growth in the United States as many operated in legal gray areas. However, the market has begun to shrink over the last couple of years as states have started pushing back.

Increased scrutiny from regulators, along with pressure from licensed live and online operators, has led states to crack down on sweepstakes casinos. Nearly one-fifth of the country has banned sweepstakes casinos, and that trend will continue to grow.

It’s not a question of whether states will act, but when. We’ll take a look at which states are likely to ban sweepstakes casinos, and what this means to players and the overall market.

Where the Crackdown Stands Right Now

Michigan was the first state to target sweepstakes casinos. They issued a cease-and-desist letter to Golden Hearts Games in 2023, and soon after, most operators left the state.

2025 was when the crackdown ramped up. Montana kicked things off by passing a bill banning sweeps casinos. Following them were California, New York, Nevada, New Jersey, and Connecticut. In 2026, Indiana and Maine also banned sweepstakes casinos. 

As of April 24, SB 2136 in Tennessee has passed the legislature and awaits Gov. Bill Lee’s signature. Unless he outright vetoes it, Tennessee will become the ninth US state to ban sweepstakes casinos by May 4, 2026.

Other states that have considered legislation this year that targets sweepstakes casinos include Virginia, Maryland, Mississippi, Minnesota, and Oklahoma. 

Several other states have issued cease-and-desist orders to operators. Illinois, Minnesota, Arizona, and Delaware are all among the states that have issued orders against operators.

In states like Delaware and Michigan, operators chose to leave due to heavy regulatory pressure. However, they remain in states like Virginia until state law forces them out.

Why States Are Targeting Sweepstakes Casinos

So why have states started aggressively targeting sweepstakes casinos? There are several reasons why. 

Unregulated Gambling – Sweepstakes casinos operate in a legal gray area in most states. While not explicitly named in most state laws, sites still operate unregulated and largely unlicensed. 

Lost Tax Revenue – Regulated markets receive tax revenue from licensees. Sweepstakes casinos do not contribute tax revenue, and states want their cut. 

Consumer Protection Concerns – Sweepstakes casinos often lack the same level of player protection as state-licensed casinos. They don’t offer the same responsible gaming tools, nor do they have an escalation path if you run into problems. 

Pressure from Gaming Operators – Online gaming operators are upset that they are paying exorbitant fees and taxes to operate in regulated states, while sweepstakes casinos can set up shop without penalty. State and tribally-run casinos feel that sweeps casinos are encroaching on their territory and want them out. 

Sweeps Casinos Do a Poor Job of Supporting “Sweepstakes Model” – If you pay close attention to how sweeps casinos market their product, you see they do a poor job of pretending they are a sweepstakes product. They put a lot of focus on the real-play rewards, but many slip up in their advertising. I can attest to getting multiple calls stating that you can “get 10 SC for just $10” or similar advertisements that clearly show regulators they are not a true sweepstakes product.

Expansion Similar to Offshore Sites – If you do some digging, you’ll see that the number of sweepstakes casinos is growing, and market penetration now mimics the pattern seen with offshore online casinos. We track over 240 sites, with new ones appearing regularly. The market has grown too large to ignore.

States to Watch (Ranked or Tiered)

One state still has a shot of banning sweeps casinos this year. Several others are likely to do so in 2027. Here’s a look at which states to watch.

Oklahoma: Next State to Pass a Ban in 2026

Why It’s at Risk

Senate Bill 1589 has already passed the Senate and is moving towards a vote in the House. Oklahoma lawmakers are targeting sweepstakes casinos because they argue they siphon gaming revenue from tribal operators, resulting in less revenue for the state.

What Could Happen

If the bill passes, the state will ban sweepstakes casinos immediately. Sites will have to leave the state right away or face prosecution.

Outlook

Oklahoma will be the next state to ban sweeps casinos in 2026. The bill shows no signs of slowing, and the legislative session runs until May 29, 2026, giving House lawmakers plenty of time to bring it to a vote. By mid-June, expect the death of the sweepstakes market in Oklahoma.

Virginia: Next State to Ban Sweeps?

Why It’s at Risk

Virginia has a regulated sports betting and live casino industry, and they are now looking at legalizing online gambling. As part of this regulatory push, they want to ban sweepstakes casinos to protect iGaming operators.

What Could Happen

When lawmakers regulate iGaming, the state will make all sweepstakes casino and poker activity illegal.

Outlook

Virginia looks to be one of the next states likely to regulate iGaming. The only reason it didn’t happen in 2026 was that lawmakers couldn't reach a consensus on how to distribute tax revenue. Once they settle this issue, iGaming will be legalized, and sweeps casinos will be banned. 

Personal Outlook: I live in Virginia and don’t look forward to this outcome. However, I can see the writing on the wall and am prepared for the sweeps market to exit the state by the end of 2027.

Louisiana: Would Already Be Banned if Not for Governor’s Veto

Why It’s at Risk

The Louisiana legislature actually passed a bill (SB181) in 2025 to ban sweepstakes casinos. Gov. Jeff Landry vetoed the bill, stating it was unnecessary as he believed state law was already clear on the matter. They tried again in 2026, but legislation did not progress.

Regulators have been actively targeting sweeps casinos, issuing over 40 cease-and-desist letters to operators. The political climate is hostile towards sweep operators, and it is likely they will continue to target them in 2027.

What Could Happen

Lawmakers are looking for an outright ban and criminalization of sweepstakes activity. If this happens, not only will operators be at risk, but payment processors and anyone who promotes sweepstakes casinos, including the media, will be at risk as well.

Outlook

The legislature wants to outlaw sweepstakes casinos, but the governor thinks the law already outlaws them adequately. If they can get him on board, Louisiana will get its ban. Otherwise, they will have to wait until after 2028.

Maryland: Sites Already Leaving, So Ban is Academic

Why It’s at Risk

Maryland has been actively pressuring sweepstakes operators, issuing multiple cease-and-desist orders against Chumba Casino and Luckyland Slots. The state is looking to clarify gaming laws to eliminate any “gray area” interpretations. Additionally, the state aims to legalize online casinos and views a sweepstakes ban as a way to support regulation.

What Could Happen

Many major operators like Spree have already left Maryland, but others still operate. A sweepstakes ban would drive the remaining site out of the state. In the meantime, Maryland regulators will continue to apply pressure through cease-and-desist orders.

Outlook

Maryland will revisit this in 2027, and there is a high likelihood of success. Timing issues were the main hurdle to passing in 2026, so lawmakers may try to get an early jump in 2027 to finalize a bill in time.

What This Means for Players and Operators

The impact on players in states where sweeps casinos are banned is obvious. The market will die. However, there will be a residual impact on other states.

In gray area states where sites continue to operate, the market will shrink. In states that begin voicing opposition, some sites may take pre-emptive action, as seen in Maryland.

Next, some sites will shut down. Smaller sites will close because they cannot operate profitably or become risk-averse. This trend reduces market depth and may leave some states with only lower-quality operators.

You may notice a drop in quality among the legitimate sites that remain. This change could lead to reduced rewards, the removal of popular gaming brands, or slower redemption times.

The Bigger Trend: End of the Gray Market?

Ultimately, I see this as the beginning of the end for the sweepstakes casino model in its current form in states with regulated gambling options. I believe the market will eventually split. Some states will regulate sweepstakes casinos, and instead of independent sites, casinos will either partner with sweepstakes brands or create their own models.

Sites that continue to operate in regulated markets will need to switch to a social-heavy model and eliminate dual-currency systems. The only exception will be sites that award sweeps coins only in giveaways. Players would no longer receive them as a purchase bonus.

For states that don’t have regulated gambling options or those that show little interest in prosecuting sweeps operators, it will likely remain business as usual. However, the market will be drastically reduced as large market territories will be off the table. Many operators will switch to one of the new models listed above or exit the United States entirely. 

I also anticipate this trend will accelerate. Over the next five years, the industry will likely shift dramatically as more states ban sweeps casinos and others follow their lead.

The Window on Sweeps Casinos is Closing

More states have banned sweepstakes casinos than have legalized online casinos. Eight states have already banned sweeps casinos, and that number will likely reach 10 by the end of 2026. Regulators have increased their scrutiny of sweepstakes casinos in the last few years, and that trend will likely accelerate.

As states look to clarify existing gambling laws and others start to strictly regulate iGaming, sweeps casinos are being phased out. Unless states decide to add them to a regulated framework, we could see a mass exodus of sweep sites in the United States over the next five years. 

For now, our recommendations are two-fold. First, if you play at sweepstakes casinos in gray-area states, pay attention to the regulations and be prepared to redeem your SC at short notice. Otherwise, your safest option is to play only at legal, regulated online casinos and poker rooms in your state, if available.