Sweepstakes Face Legislative Heat as More States Move Toward a Complete Ban

The noose is tightening around United States sweepstakes casinos as Louisiana and Connecticut legislators make headway on legislation aimed at curbing this fast-growing sector. Both legislatures are following the example of Montana, where regulatory action has already sent shockwaves through the industry. Several other states are also considering similar legislation, spelling trouble for sweepstakes casinos nationwide.

Louisiana Lawmakers Remained Steadfast

On Tuesday, the Louisiana House unanimously voted 99-0 in favor of Senate Bill 181, a significant step in the state’s ongoing efforts to clamp down on online sweepstakes casinos. The bill successfully passed through the Senate and only received minor clarifying amendments in the House. It is now on its way to final concurrence and the governor’s signature.

The Social and Promotional Games Association (SPGA), representing companies engaged in sweepstakes and digital promotions, was quick to condemn the bill. In an official statement, the group called the legislation “a step backward” and criticized lawmakers for blurring legal entertainment with illegal gambling. Despite these protests, support for the bill has remained steadfast, with few lawmakers voicing opposition.

This bill carelessly threatens Louisiana’s economy by stifling digital innovation and driving compliant companies out of the state.

SPGA statement

Senate Bill 181 defines a sweepstakes casino as any platform offering casino-style games or sports wagering using a dual-currency system. Typically, users can freely earn one form of currency while another is purchased with real money only. Bill proponents argue that such systems allow sweepstakes casinos to skirt traditional gambling laws while boasting similar offerings to licensed gambling operators.

Connecticut Adopts a Less Nuanced Approach

Meanwhile, in Connecticut, the General Assembly is not far behind. Last month, the Senate unanimously approved SB 1235. This week, the House followed suit, sending the bill to Governor Ned Lamont for final approval. Connecticut’s Department of Consumer Protection also endorsed the bill, noting it enabled regulators to oversee a sector thriving in a legal gray area.

Unlike Louisiana’s more detailed language, Connecticut’s bill casts a wide net, seeking a complete ban on sweepstakes casinos, third-party lottery courier services, and simulated online gambling. Organizing such activities would become a Class D felony, carrying up to five years in prison and a fine of $5,000.

Sweepstakes operations have long maintained that their business models don’t qualify as traditional gambling. While some in the industry have called for a regulatory framework rather than an outright ban, recent developments indicate that states are more likely to slam the door shut first and figure out the rest later, as Georgia and Michigan are also considering complete bans.