Connecticut Becomes Second State to Outlaw Online Sweepstakes Casinos

With the stroke of a pen, Governor Ned Lamont has made Connecticut the latest state to crack down on sweepstakes casinos. Senate Bill 1235, signed into law Wednesday, formally ends online sweepstakes casinos in the state. The legislation, which passed just one day before the end of the 2025 legislative session, goes into effect on October 1.

The Legislation Encompasses Several Other Changes

The new law makes it a felony to conduct or promote sweepstakes not associated with a legitimate sale of goods or services. This change primarily affects platforms that use simulated gambling devices mimicking online casino play. Potential violators could face up to one year in prison and a fine of up to $2,000.

No person shall conduct or promote a sweepstakes or a promotional drawing… that is not related to the bona fide sale of goods, services, or property.

Senate Bill 1235

While the new legislation primarily targets sweepstakes casinos, it also tweaks the rest of the state’s gambling sector. The law greenlights limited betting on combat sports. Collegiate tournaments involving in-state teams also received the green light, provided such tournaments involve four or more schools. Previously, wagers involving Connecticut college teams were completely off-limits.

A prior iteration of SB 1235 also attempted to close third-party lottery couriers and resellers. However, a later amendment struck down that provision. Supporters of the new bill argue it fills a regulatory gap, allowing gambling-adjacent platforms to run unchecked and outside the scope of the state’s gaming regulations. They contend that all forms of wagering should adhere to the same standards of fairness, transparency, and accountability.

Sweepstakes Face Increasing Regulatory Pressure

Connecticut becomes the second state, after Montana, to enact a formal ban on sweepstakes-style online casino platforms as the sector faces rising scrutiny. New York regulators recently shut down over two dozen illegal sweepstakes casinos, citing concerns regarding consumer protection. These platforms drew the attention of regulators due to perceived problems related to data security, game fairness, and responsible gambling safeguards.

However, not all states are marching in lockstep. Louisiana Governor Jeff Landry recently vetoed a similar bill, arguing that the Louisiana Gaming Control Board already has the necessary enforcement mechanisms to oversee sweepstakes casinos. Landry noted that the proposed complete ban would be unnecessary and could create potential legal issues.

Despite shifting opinions in different states, US sweepstakes casinos face increasing pressure to adapt or be forced out of certain states. Examples like Connecticut and Montana have demonstrated that lawmakers are more likely to slam the door first and consider a more nuanced solution later. While the industry boasts stable growth in many jurisdictions, rising negative sentiment and pressure from the regulated gambling sector represent an immediate challenge.