The 2026 picture
For years, sweepstakes casinos operated almost everywhere in the United States on the theory that they were promotions rather than gambling. That default has broken down. As of September 2026 the map is a patchwork, and it is contracting, driven by two distinct mechanisms. Some states have passed new laws that specifically ban the dual-currency model. Others have left their statutes untouched and instead used attorneys general and gaming regulators to declare the activity illegal under existing law and order operators out.
The distinction matters because it changes how firmly the door is shut. A statute is durable and hard to reverse; an enforcement letter relies on regulators pressing the point and on operators choosing to comply. Read together, the two tracks show a national trend moving in one direction, even as the details differ state by state.
The stakes behind the map are substantial. US players spent an estimated $14.3 billion on sweepstakes coin packages in 2025, per Eilers and Krejcik Gaming, and the licensed casino industry, through the American Gaming Association, has lobbied states to act, framing its case simply: if it is gambling, it should play by the same rules. That combination of real money on one side and organized, well-funded opposition on the other helps explain why the map moved so fast in barely a year.
States with statutory bans
Montana was the pioneer. Governor Greg Gianforte signed Senate Bill 555 in May 2025, effective 1 October 2025, becoming the first state to ban the model outright. Connecticut followed as the second, with Governor Ned Lamont signing what became Public Act 25-112 on 12 June 2025, making operation a felony punishable by up to five years in prison, effective the same October date. Nevada toughened its illegal-gambling law through Senate Bill 256 on the same timeline, and every major sweepstakes operator now blocks Nevada players.
The bans then reached the biggest markets. New Jersey's Governor Phil Murphy signed A5447 on 15 August 2025, with fines up to $25,000 per violation. California, the largest state by population, followed when Governor Gavin Newsom signed AB 831 on 11 October 2025, effective 1 January 2026, after unanimous votes of 36-0 in the Senate and 63-0 in the Assembly. New York enacted its own ban in December 2025 with fines of $10,000 to $100,000 per violation. Louisiana took a two-step path: Governor Jeff Landry vetoed a standalone ban in June 2025, then signed broader gambling bills in 2026 that added racketeering exposure. Tennessee closed the group when Governor Bill Lee signed SB 2136 on 22 May 2026, effective immediately.
“I'm not so sure we should be taking the victory lap quite yet.”
States enforcing under existing law
A second set of states never needed a new statute. New York's Attorney General Letitia James issued cease-and-desist letters to 26 operators in June 2025 and then secured an $8 million settlement from VGW, the operator of Chumba Casino, Global Poker and LuckyLand Slots, announced on 9 September 2026, a resolution Gaming Trend Wire has covered separately. Tennessee's Attorney General Jonathan Skrmetti sent letters to nearly 40 operators in December 2025, before the state later passed its statute.
Regulators elsewhere leaned on their own authority. The Michigan Gaming Control Board issued 12 cease-and-desist letters to offshore operators on 3 December 2025, having earlier pushed out brands including Stake.us and VGW's LuckyLand. Arizona's Department of Gaming ordered seven operators, including Stake.us, to stop on 30 June 2025. And in the largest single action, the Illinois Gaming Board and Attorney General Kwame Raoul ordered 65 operators to block the state on 5 February 2026. Delaware, Maryland and West Virginia have used cease-and-desist letters and subpoenas as well, according to legal analysis by Snell and Wilmer.
Where the model still operates
Despite the wave, sweepstakes casinos remain reachable across much of the country, because most states have neither passed a ban nor mounted an active enforcement campaign. Several very large states have no explicit statutory prohibition, leaving the model in the same grey area it always occupied there. That is why the sector, though smaller, has not collapsed: the banned and actively enforcing states are a minority of the map, even if they include some of the most populous.
The picture is also unstable. Enforcement letters do not always change behavior, as Illinois showed when most of the 65 named operators kept serving the state weeks after being told to stop. And the list of acting states has kept growing month by month through 2026, so a platform legal in a given state today can find itself shut out after a single legislative session or a single regulator's letter.
The timeline and our take
The crackdown compressed into barely a year. Montana opened it in May 2025; Connecticut, Nevada and New Jersey followed over the summer; California and New York arrived by the end of 2025; Louisiana and Tennessee sealed their statutes in 2026, alongside major enforcement sweeps in Michigan, Arizona and Illinois. New York's sequence, a cease-and-desist round, then a statute, then a paid settlement, has become a template other states can copy.
Our take is that the direction is set but the endgame is not. The statutory bans are durable and will keep spreading, and the licensed industry, through the American Gaming Association, is actively lobbying for more. But enforcement reach is the open question: operators are often offshore, quick to rebrand, and, as Illinois demonstrated, willing to ignore letters. The map will keep shrinking for the compliant operators while the defiant ones test how far a cease-and-desist letter can actually reach. As one analyst put it, this is not yet a victory lap.
Frequently asked
Where are sweepstakes casinos banned in the US?
By mid-2026, eight states had laws banning or effectively prohibiting the dual-currency model: Montana, Connecticut, Nevada, New Jersey, California, New York, Louisiana and Tennessee. Separately, regulators in states including Michigan, Arizona, Illinois, Delaware, Maryland and West Virginia have moved against operators under existing law.
Which state banned sweepstakes casinos first?
Montana. Governor Greg Gianforte signed Senate Bill 555 in May 2025, effective 1 October 2025, making Montana the first state to ban the dual-currency sweepstakes model outright. Connecticut became the second, with a law signed on 12 June 2025 that also took effect that October.
Are sweepstakes casinos legal in California and New York?
No. California banned them through AB 831, signed on 11 October 2025 and effective 1 January 2026, and New York enacted its own ban in December 2025 with fines of $10,000 to $100,000 per violation. New York also secured an $8 million settlement from VGW in September 2026.
What is the difference between a statutory ban and an enforcement action?
A statutory ban is a new law that specifically prohibits the model; it is durable and hard to reverse. An enforcement action leaves existing statutes untouched and uses attorneys general or gaming regulators to declare the activity illegal and order operators out, which depends on regulators pressing the point and operators complying.
Can players be prosecuted for using sweepstakes casinos?
The laws described here are aimed at operators and the businesses that support them. New York's ban, for example, targets operators, payment processors, geolocation providers and media affiliates, with fines of $10,000 to $100,000 per violation, rather than individual players.
Are sweepstakes casinos still legal in most states?
Yes, in the sense that most states have neither passed a ban nor run an active enforcement campaign, so the model remains reachable across much of the country. But the banned and enforcing list has grown month by month through 2026, so a platform legal in a state today can be shut out after one legislative session or regulator's letter.