The multibillion-dollar "sweepstakes" casino sector is stealthily growing through a legal gray area that most authorities are totally ignoring, while Washington and state governors are fixated on the legality of election betting.

Sweepstakes casinos are promoted as social gaming platforms that let users play interactive table games and spin online slots.

The platforms do, however, provide a secondary digital currency known as sweeps coins, which purportedly enable the user to participate in online casino sweepstakes games where winning credits can be exchanged for cash withdrawals.

Only eight states—Connecticut, Delaware, Maine, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia—allow online casino gambling with slots and table games.

In cease-and-desist letters and court documents, those states and jurisdictions without iGaming have claimed that sweepstakes casinos' use of the dual-currency sweepstakes model violates state gaming regulations.

Sweepstakes casinos respond that they run promotional games, similar to a store offering a sweepstakes; McDonald's Monopoly Game is an often mentioned example.

Staying Unnoticed

Sweepstakes casinos have relished being out of the spotlight while politicians, attorneys general, and gaming regulators concentrate on prediction markets. As a result, attempts to outlaw the games at the state level have often failed.

Legislation in Massachusetts that would have made it illegal "for any person or entity" to conduct or run online sweepstakes within the state failed to get sufficient support in March. Instead, the Massachusetts Joint Economic Development and Emerging Technologies Committee decided to forward House Bill 4431 for more examination.

The Maryland General Assembly adjourned last week without passing a proposed prohibition on sweepstakes casinos.

A proposed ban on "interactive games from illegal markets" in Maryland House Bill 295 would impose fines of up to $100,000 and three years in jail on operators of online sweepstakes casinos.

The Maryland House of Delegates voted 105–24 in favor of HB295 in March. However, the state Senate Committee on Budget and Taxation caused the bill to stall. On April 13, the Maryland General Assembly adjourned for 2026.

The Maryland Lottery and Gaming Control Agency filed a federal complaint against Kalshi in the state's US District Court, making Maryland a focal point of the ongoing legal battle against prediction markets. The US Court of Appeals for the Fourth Circuit has since heard an appeal of the case.

In support of Maryland's arguments that state gaming laws are not superseded by the Commodity Exchange Act, which governs prediction markets on a federal level, thirty-eight states have submitted papers.

In 2026, attempts to outlaw sweepstakes casinos in Utah, Mississippi, and Virginia were also unsuccessful. In the final weeks of their respective legislatures, similar legislation in Tennessee and Oklahoma confronts significant obstacles.

Sweepstakes Bills for Indiana and Maine 

In 2026, sweepstakes casinos were prohibited in two states: Maine and Indiana. The gaming laws of Maine Legislative Document 2007 and Indiana House Bill 1052 were updated to specify and provide civil penalties for holding sweepstakes games.

With its 2026 session ending on May 18, Minnesota may join Maine and Indiana in outlawing sweepstakes casinos. A floor vote on Senate File 4474, which would outlaw online sweepstakes in Minnesota, has not yet taken place.