Where Are Sweepstakes Casinos Legal in the USA?

Federal Legal Framework

Sweepstake casinos are legal as they do not fall under the definition of gambling laid out by the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. This bill prohibits gambling at a federal level, preventing businesses from “knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”

If you live in a state where online casinos are illegal, Sweepstakes Casinos provide an alternative, as they do not require players to ever wager real money. All purchases are optional, and the sites regularly keep players accounts topped up through free bonuses and promotions.

Of course, there are still player protection laws in place. For example, all players must be at least 18 years old to use a sweepstakes casino. There are also strict privacy and advertising laws in place, with sweepstakes casinos permitted from pushing players towards real-money gambling sites that they may also operate.

States Where Sweepstakes Casinos Are Legal

Sweepstakes Casinos are largely available across the United States, with over 40 states legalizing the practice. Join me as I examine the legality of sweepstakes casinos state by state.

Alabama: Sweepstakes Casinos are fully legal in the state of Alabama. Social casinos are one of the best options for casino lovers in the state, with other forms of online gambling being restricted. There are, however, five tribal casinos currently available in the state. All sweep casinos must comply with Alabama state law. Some sweeps casinos may not be available in the state.

Alaska: Sweepstakes casinos are available in Alaska. All other games of chance are banned in the state, with tribal casinos even permitted from offering slot games, video poker, or table games. As such, sweepstakes offer a brilliant option for those who want to take some games for a spin.

Arizona: No legal online casinos are available in Arizona, making sweepstakes casinos an excellent option for players there. The state legalized online sports betting in 2021, which could pave the way for legalized online casinos in the future.

Arkansas: Arkansas has a history of gambling, and it was the first state to offer horse and greyhound racing betting. Players in Arkansas are allowed to access and play at sweepstakes casinos legally.

California: Sweepstakes Casinos are fully legal in the Golden State and offer an excellent option for players looking to spin some reels and play some cards. All other forms of online gambling are illegal in California, and there are no indications that this will change in the future.

Colorado: Players in Colorado are able to access many of the best sweepstakes casinos in the US. All other forms of online gambling are illegal in the state.

Connecticut: All forms of gambling in Connecticut are illegal. However, the state does operate a handful of tribal casinos that are allowed to offer games of chance and table games. As such, sweepstakes casinos are an excellent option for residents. They are fully legal, and players can claim prizes.

Delaware: Delaware was one of the first states to legalize online gambling with its iGaming bill in 2012. It is also one of the best states to play at online sweepstakes casinos. Players can play at many top sweepstakes casinos in the state, and they can claim real prizes.

Georgia: Georgia is one of the stricter states regarding online gambling, but sweepstakes casinos are still legal in the state. While it has strict rules for players using offshore casinos and playing poker, prizes can still be claimed at social casinos.

Hawaii: Hawaii is another state with very strict gambling laws. As such, sweepstakes casinos can be a brilliant option for players who want to unwind and spin some reels occasionally.

Illinois: Illinois is one of the country’s more relaxed states regarding gambling, with sports betting, horse racing, casino gaming, poker, and bingo all being legal. Players who are looking to play for free can do so at some of the US’s top online sweepstakes casinos, all of which are active in Illinois.

Indiana: Sweepstake Casinos are fully legal in Indiana, with players able to claim real-money prizes. Other than this, the state has complex gambling laws, with riverboat casinos being in operation and one tribal casino being available for residents.

Iowa: Iowa is a relaxed state when it comes to gambling laws. The state’s constitution has allowed for many forms of gambling over the years. However, online casinos are still not legal, which means sweepstakes casinos provide a brilliant option for residents.

Kansas: Kansas’s state law does not directly reference online casinos, but gambling on games of chance is not prohibited within state lines. Of course, sweepstakes casinos are fully legal here, allowing players to enjoy their favorite slots and games for free.

Louisiana: Sweepstakes casinos are fully legal in the state of Louisiana. Players are also able to claim prizes with their winnings. There is a tax on winnings over $600 on sweepstakes and lotteries.

Maine: Online gambling is illegal in Maine, but sweepstakes casinos are allowed. There are some other types of gambling allowed in the state, including the lottery, charitable bingo games, and daily fantasy sports.

Maryland: Maryland is one of the most relaxed states regarding casinos, with several licensed premises available. There is also a plethora of sweepstakes casinos that players can access there.

Massachusetts: Massachusetts, as a state, has a good relationship with gambling. The Massachusetts Gaming Commission was established in 2011 and is viewed as one of the more reliable regulators in the country. All sweepstakes casinos are available there, with players legally allowed to claim prizes.

Minnesota: Minnesota allows for charitable gambling and for sweepstakes casinos. Many of the top sweepstakes casinos we have reviewed here at sweepstakescasino.net are available for residents in Minnesota.

Missouri: Missouri has made several attempts in its recent history to legalize online gambling, but each one has failed. Sweepstakes casinos are fully legal in the state, providing players with an excellent chance to enjoy slot games, table games, and much more.

Montana: Players in Montana are currently allowed to access and play at sweepstakes casinos. However, there has been some pushback from within the state regarding their status, so residents should keep their eyes on any potential changes in the future.

Nebraska: Nebraska is a state that could legalize online casino gambling in the future. In the meantime, social and sweepstakes casinos provide a brilliant option for players, with many of the top sweepstakes casinos reviewed on this site operating there.

Nevada: It should come as no surprise that Nevada, the home of Las Vegas and some of the world’s biggest casinos, allows players to play at sweepstakes casinos and claim prizes. Online casino gambling for real money is not fully legal in the state, with the Nevada Gaming Control Board and Commission only regulating specific sites.

New Hampshire: New Hampshire is a state famous for its charitable gambling scene. The state also hosts some of the best sweepstakes casinos in the US, with residents able to play for prizes. It has also legalized online sports betting in recent years.

New Jersey: New Jersey is the poster boy for regulated online gambling in the US. Along with real-money online casinos and sportsbooks, players in Garden State have full access to many top sweepstakes casinos.

New Mexico: Sweepstakes Casinos are fully legal in the state of New Mexico. The state is unlikely to legalize any other forms of online gambling or betting soon, so sweep casinos provide an excellent alternative for residents.

North Carolina: North Carolina is a state with strict gambling laws, with virtually all forms of real-money gambling being prohibited. Fortunately, sweepstakes are permitted, which means residents can enjoy free-to-play action at top sweepstakes casinos.

North Dakota: North Dakota is another state where online gambling is banned. However, the state law has not been updated to clearly outline this. Regardless, players are permitted to play for free at sweepstakes casinos and can cash in their virtual coins for prizes.

Ohio: Ohio is a well-regulated state that allows players to partake in lotteries, horse racing, daily fantasy sports, and bingo events. If players want to play at an online casino, they can use sweepstakes casinos, with real-money casinos being prohibited.

Oklahoma: Somewhat surprisingly, Oklahoma is actually one of the biggest gambling states in the US, with over 100 land-based casinos in operation. However, online casinos are still prohibited, so if residents want to leave the casino and spin some slots online, they will need to use one of the many active sweepstakes casinos there.

Oregon: Oregon is another state that is liberal with land-based casinos but not so much with online casinos. Sports betting and in-person gambling are allowed, but if you want to play online, you will need to use one of the many sportsbooks we have reviewed here at sweepstakescasino.net.

Pennsylvania: The expended gaming act of 2017 made online gambling and sports betting legal in Pennsylvania. That doesn’t mean that residents can’t still enjoy some of the best sweepstakes casinos in the US in the state.

Rhode Island: Sweepstakes casinos are fully legal in Rhode Island, with players able to spin the reels and play cards on their favorite games. The state also legalized online sports betting at authorized venues in 2018.

South Carolina: South Carolina has strict gambling laws, with all forms of gambling, except for lotteries and charitable bingo prohibited. Sweepstakes casinos are fully legal in the state, which is excellent because it is unlikely there will be any major changes soon.

Tennessee: Tennesse is strict with its gambling laws. Mobile sports betting apps were legalized in the state in 2020, but all other forms of gambling remain illegal. Sweepstakes casinos are fully legal, with players able to exchange their virtual coins for real prizes.

Texas: Online gambling is totally prohibited in Texas, including the use of offshore casinos. As such, many Texans enjoy playing at online sweepstakes casinos. The state is one of the most populated in America, attracting attention from all of the major top sweepstakes casinos.

Utah: Utah is one of the strictest states for online gambling. Sweepstakes casinos are legal in the state, but the tax threshold for winnings is quite low at $1,200, so players should be aware of this. Due to the influence of the Mormon Church in the state, it is unlikely that real-money gambling will be legalized there.

Vermont: Vermont is a state that has a good relationship with gambling. The state legalized sports betting in 2023, with Bill H/.127 being passed. Online casinos are still not prohibited, but sweepstakes casinos provide an excellent alternative.

Virginia: Both sweepstakes casinos and online casinos are legal in Virginia. The state is one of the more liberal with online gaming, which has attracted many of the industry’s top operators, including many of the best online sweepstakes casinos.

West Virginia: West Virginia is another state that has legalized online casinos, with the state passing a bill to legalize them in 2021. Players who live there are still able to access top sweepstakes casinos where they can play all of their favorite online slots for free.

Wisconsin: Wisconsin permits players to play at sweepstakes casinos, while all other online casinos and gambling activities are prohibited. Players can win real prizes when playing at sweeps casinos in Wisconsin.

Wyoming: Finally, Wyoming is another state where sweepstakes casinos are fully legalized. The state has legalized sports betting and in-person gambling at tribal casinos, but real-money casinos are still illegal.

States with Restrictions

Florida: Florida is one of the few states that have rules regarding prizes at sweepstakes casinos. While sweepstakes casinos are fully legal in the state, prizes are capped at $5,000. While this is not a major issue for most operators, some are not active in the state to avoid any potential problems.

Idaho: Idaho has tough restrictions in place regarding advertising sweepstakes, the use of promotions, and taxation on sweepstakes winnings. One of the most crucial restrictions is players can only use Gold Coins when playing at a sweepstakes casino, which means no prizes can be won. On top of this, complex laws around promotions and sweepstakes mean that the Gem State is somewhere that a lot of top sweepstakes casinos choose not to operate.

Kentucky: Kentucky is another state with some complex rules around sweepstakes casinos. The state has legalized online sports betting, but online casinos still remain illegal. Sweepstakes have some complex laws surrounding the way they are advertised and how they are paid out. Prizes are also taxed when they are worth over $600. The complex landscape for sweeps casinos in Kentucky means that some operators avoid the state.

New York: Like Flordia, the redemption limit in New York is currently set at $5,000 for any sweepstakes casinos. There are also a few other complex laws in place surrounding bonuses at sweeps casinos. As such, several operators may not be available in New York.

States Where Sweepstakes Casinos Are Prohibited

Washington: Washington is the only state to have never legalized sweepstakes casino in any form. The Washington Gambling Commission states that “No Washington law or rule uses “sweepstakes” to reference a raffle or promotional contest of chance, as this type of activity is not authorized.”

Michigan: Michigan has taken a hard stance on sweepstakes casinos over the last few years, with most operators having now pulled out of the state. The ban stems from concerns that sweepstakes casinos replicate the experience of gambling and will encourage players to do the same. In early 2024, cease and desist letters were issued to several major operators, forcing others to leave the state.

How to Check Legal Status in Your State

If you are confused about the legality of sweepstakes casinos in your state, you are probably not the only one. There are complex rules in place, but in most states, you are allowed to play sweepstakes casinos legally. If you have concerns, however, you can follow these steps to check if a site is legal:

• Read the casino’s information page: If you have concerns about an online casino, one of the first things you can do is check the casino’s own webpage. It will typically provide information on states where it is prohibited.
• Check local government websites: Each state will have its own governing body in charge of dealing with online gambling, sweepstakes, and lotteries. We recommend checking these to see if you can find clear information on your state’s legal position. If you can not, you can always check other local authorities or contact someone if you need to.
• Keep up with the news: The legal landscape in American gambling is always changing. If you want to keep up to date with which sweepstakes casinos are legal, check in with major news outlets regularly. We also regularly update our information here at sweepstakescasino.net.

Legal Grey Areas

We have seen legal grey areas create problems for sweepstakes casinos in several states, with Michigan being the most famous example. Michigan state laws have argued that sweepstakes casinos require a license, and it will not approve them for one. As such, operators have left the state amid fears of fines.

Over the years, class action lawsuits have been filed against sweepstakes casinos in several states, including Alabama, Kentucky, and California. These lawsuits claim that sweepstakes casinos are technically offering illegal gambling services.

An ongoing example is a class-action lawsuit filed by Destiny Kennedy against VGW Holdings, VGW Malta Limited, VGW Luckyland Inc., and CGW GP Limited. The lawsuit has been filed in Georgia, and it argues that the websites misrepresent themselves and that they are gambling websites.

Given the complex nature of the US legal system, each state will have different definitions of what is and isn’t gambling. At the time of writing, however, it is still perfectly legal to play at sweepstakes casinos for free in almost all US states.

Impact of State Laws on Sweepstakes Casinos

With each state having different laws on what constitutes online gambling, The status of sweepstakes casinos can be impacted quickly if laws change. The biggest example of these changes came in Michigan in early 2024 when the Michigan Gaming Control Board issued cease-and-desist letters to several operators.

The Michigan Gaming Control Board stated that several sweepstake sites were in violation of the Lawful Internet Gaming Act that they were offering what they determined to be gambling services, and that they were doing so without a license.

Idaho has put similar rules in place, with players only allowed to use Gold Coins, which are the free currencies offered by sweepstakes casinos. If you want to purchase coins and play, you will not be able to do so, as Idaho has determined that this constitutes online gambling, which is illegal in the state.

With online gambling becoming increasingly popular across the United States, more regulatory bodies are appearing. New gambling bills are being passed, and the definitions of online gambling are changing, which could impact how sweepstakes casinos are regulated and defined.

Future Legal Developments

Determining what the future of sweepstakes casinos in the US looks like is difficult as the online gambling landscape is constantly changing and adapting.

This constant evolution means that the status of sweepstakes casinos will probably shift a little in the coming years. However, a widespread ban or kickbacks against sweepstakes casinos like what we have seen in Michigan are unlikely on a bigger scale. Sweepstakes casinos provide an excellent alternative for casino lovers, and they also generate millions in tax revenue for local and federal governments.

Of course, there will always be vocal opposition to sweepstakes casinos. Legal action has been brought against them in several states, such as California and Alabama, but most of this has been unsuccessful. If states want to regulate sweepstakes casinos, we could see more of a push toward licensing. However, if this happens, operators are likely to leave states.

There is also tension between land-based casinos and sweepstakes casinos, which see them as viable competition. If more states begin to embrace online gambling, major players could get involved in the sweepstakes markets as they attempt to establish a foothold in the United States. Stake.us is a prime example of this, with the sweepstakes site acting as a partner site to its real money offering in legal states.

References

• https://www.michigan.gov/mgcb/news/2024/01/18/mgcb-sends-cease-and-desist-letters
• https://topclassactions.com/lawsuit-settlements/money/popular-online-game-operators-face-class-action-over-illegal-gambling-claims/
• https://www.legalsportsreport.com/delaware/casino/
• https://files.lasvegasnevada.gov/finance/LasVegas-Sweepstakes-Official-Rules-190416.doc
• https://www.nvbar.org/wp-content/uploads/12.-Enter-to-Win.pdf
• https://www.law.cornell.edu/regulations/idaho/IDAPA-04.02.01.080
• https://www.olshanlaw.com/sweepstakes-law-basics
• https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=52653
• https://travelwyoming.com/enter-to-win/wyoming-sweepstakes-official-rules/
• http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0800-0899/0849/Sections/0849.094.html
• https://revenue.louisiana.gov/LawsPolicies/1525PublishedVersion.pdf
• https://turbotax.intuit.com/tax-tips/general/everything-you-need-to-know-about-filing-taxes-on-winnings/L7ifGWjkX
• https://www.irs.gov/help/ita/is-the-prize-or-award-i-received-taxable