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Sweepstakes Casinos in 2027: The Ban Wave Reaches Its Next Phase

By American.Bet TeamUpdated Oct 31, 202621+
Sweepstakes Casinos in 2027: a short stack of poker chips on felt, inside an outline map of the United States

Two years ago, dual-currency sweepstakes casinos looked like the side door into online gambling that state lawmakers would never get around to closing. That door is now shut in many of the country’s biggest markets, and on November 1, 2026, Oklahoma becomes the latest state to lock it. Our read is that 2027 will be less about whether states act and more about how hard they hit the companies, payment firms and promoters behind the platforms.

In this article 8 sections

Sweepstakes casino bans: how 2025 changed the map

The first wave landed in 2025. The American Gaming Association’s State of the States 2026 report lists California, Connecticut, Montana, New Jersey and New York as states that passed laws that “explicitly prohibit sweepstakes gaming platforms that mimic online casinos or sportsbooks.” Independent trackers also count Nevada’s SB 256, which took effect on October 1, 2025, alongside Montana’s SB 555 and Connecticut’s SB 1235.

California was the one that changed the economics. AB 831 passed the legislature with no votes against it and took effect on January 1, 2026, with backing from the California Nations Indian Gaming Association. The law reaches beyond operators to payment processors, game suppliers and marketing partners, with penalties of up to one year in jail and fines of $25,000 per violation. Brands including Vivaro.us, Carnival Citi, Ruby Sweeps and Dara Casino withdrew before the bill was even signed, and suppliers Evolution and Pragmatic Play pulled games from California-facing platforms such as Stake.us and Pulsz. For readers in the Golden State, our California gambling guide tracks what remains legal.

The size of that loss matters. One estimate cited by a state-by-state ban tracker put California at roughly 17 to 20 percent of US sweepstakes revenue before the ban. The industry’s own warning was blunter: Jeff Duncan of the Social Gaming Leadership Alliance said AB 831 would “immediately strip $1 billion out of the state’s economy.”

New York followed in December 2025, when Governor Kathy Hochul signed S5935-A. New Jersey had already moved in August 2025 with A 5447, which took effect on signing.

Dual-currency crackdown in 2026: the South and Midwest join in

2026 showed the issue has no regional label. According to the tracker, Indiana (HB 1052, effective July 1, 2026), Maine (LD 2007), Tennessee (SB 2136/HB 1885, signed May 22, 2026) and Louisiana all enacted bans this year, with Oklahoma’s law starting on November 1.

Louisiana went furthest. HB 883 raised the maximum fine for this kind of “gambling by computer” from $20,000 to $100,000 and passed 98-0 in the House and 35-0 in the Senate. Its companion, HB 53, folded gambling violations into the state’s racketeering statute, which carries up to 50 years of hard labor and fines of up to $1 million. Both took effect on August 1, 2026, and both can reach affiliates, payment processors and marketers.

Oklahoma is the most telling case. Governor Kevin Stitt vetoed SB 1589, and lawmakers overrode him 34-10 in the Senate and 68-19 in the House. Operators, suppliers, geolocation providers, promoters and affiliates now face a Class C2 felony. Tribal gaming leaders backed the ban, arguing that authorized gambling must run through tribal compacts. When a governor’s veto cannot hold, our read is that the politics have shifted for good.

Attorneys general and regulators: enforcement without new laws

Legislation is only half of the pressure. Tennessee Attorney General Jonathan Skrmetti sent cease-and-desist letters to almost 40 operators, and his office announced on December 29, 2025 that 38 sweepstakes casinos had agreed to comply, arguing the model is an unlawful lottery under the Tennessee Constitution. “The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money,” Skrmetti said.

New York shows what comes after the letters. On September 9, 2026, Attorney General Letitia James secured $8 million from VGW Holdings, operator of Chumba Casino, Global Poker and Luckyland Slots, covering disgorgement, penalties and costs. Her office said some New Yorkers “lost tens of thousands of dollars.”

States without a dedicated sweepstakes statute are using the laws they already have. The Illinois Gaming Board sent a February 4, 2026 cease-and-desist letter to the ACE sweepstakes platform, warning that its affiliates and business partners could face civil or criminal penalties. In Michigan, the Gaming Control Board sent letters to 32 more operators offering “casino-style games, sweepstakes-style games, or sports betting” without a license, after 45 orders announced in April. The AGA report adds that Arizona’s Department of Gaming sent letters to prominent platforms, and that Delaware’s Division of Gaming Enforcement found one operator “misrepresented its services as promotional sweepstakes.” Players in the state can compare the licensed alternatives in our Michigan online casinos guide.

AGA vs. SPGA: the fight over what sweepstakes casinos are

The two sides disagree on the basic definition. The AGA’s position is that these are unlicensed casinos, and in its State of the States letter the trade group claimed credit: “we successfully stopped the advance of sweepstakes casinos and saw them pushed out of many key markets.”

The Social and Promotional Games Association, by contrast, has fought each bill as an attack on a lawful promotional model. When New York lawmakers approved S5935, an SPGA spokesperson called it “a shortsighted bill that threatens to kill investment, stifle innovation” and urged a veto. The SGLA has pitched “sensible regulatory frameworks” as the alternative.

Sweepstakes revenue estimates point to a shrinking market

Eilers & Krejcik Gaming, as reported in September 2025, cut its 2025 net revenue estimate for the sector from $4.7 billion to $4 billion, and its base case for 2026 was a 10 percent fall to $3.6 billion, with a bear case of $2.8 billion. That forecast came before Indiana, Tennessee, Louisiana and Oklahoma acted, so our read is that the bear case looks closer to reality than the base case.

Meanwhile, the regulated side keeps growing. The AGA reports that US commercial iGaming revenue reached $10.73 billion in 2025, up 27.6 percent, within record total commercial gaming revenue of about $78.6 billion. That gap gives licensed operators and tribes every reason to keep lobbying.

Which states may target sweepstakes casinos in 2027

The 2026 bills that failed are the best guide to 2027. The tracker lists Florida (SB 1580, HB 189 and HB 591, all of which died in March), Minnesota (SF 4474, which passed the Senate 62-3 before dying in the House), Mississippi (SB 2104, passed by the Senate), Virginia (HB 161/SB 118, which failed in conference on March 14), Massachusetts (H 4431, stalled in committee) and Hawaii (SB 3281, deferred). A bill that cleared one chamber by a wide margin is usually the first to come back, which puts Minnesota and Mississippi near the top of our list.

What to expect in 2027

  • More bans in states where bills nearly passed. Minnesota’s 62-3 Senate vote and Mississippi’s Senate passage make both strong candidates to finish the job in 2027 sessions.
  • Florida tries again. Three bills died there in 2026. We expect another attempt, though the outcome is far from certain.
  • Penalties copy Louisiana and Oklahoma. Racketeering exposure and felony charges for affiliates and payment processors are now the template, and we expect new bills to aim at the supply chain, not just the platforms.
  • Bigger AG settlements. New York’s $8 million VGW deal sets a benchmark. We expect other attorneys general to pursue disgorgement, not just compliance letters.
  • Regulators keep acting without new laws. Michigan and Illinois are already treating sweepstakes sites like offshore casinos, and we expect more states to follow before their legislatures act.
  • A smaller sweepstakes market. With roughly a fifth of revenue gone from California alone and four more states closing in 2026, we expect 2027 sector revenue to come in below the $3.6 billion base case Eilers & Krejcik set for 2026.
  • No state adopts a regulate-and-tax model. The industry keeps proposing one, and no legislature has bitten. We don’t expect that to change in 2027.

For a state-by-state view of where sweepstakes platforms still operate, see our sweepstakes casinos hub. Gambling should stay entertainment: play only where it’s legal and if you’re 21+ (or the minimum age in your state). If it stops being fun, call 1-800-GAMBLER or visit GambleAware.org.

Further reading on American.Bet

Will sweepstakes casinos be banned in more states in 2027?

We expect so. Bills in Minnesota and Mississippi passed one chamber in 2026 before stalling, and Florida, Virginia, Massachusetts and Hawaii all considered bans.

Which states have banned dual-currency sweepstakes casinos so far?

As of October 2026, laws are in place in California, Connecticut, Montana, Nevada, New Jersey, New York, Indiana, Maine, Tennessee and Louisiana, with Oklahoma’s ban taking effect on November 1, 2026.

Who do the new sweepstakes casino laws target?

The newest laws are written to reach operators, suppliers, payment processors, affiliates and promoters, not only the platforms themselves. Penalties range from fines of $25,000 per violation in California to racketeering exposure in Louisiana.

Find your state

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