The end of sweepstakes? Legislative bans gain momentum across the United States

The end of sweepstakes? Legislative bans gain momentum across the United States    

The regulatory landscape for sweepstakes gaming is shifting rapidly in the U.S., with several states now actively pursuing legislation to prohibit or restrict these operators. The movement a growing crackdown on alternative gaming models in a legal grey area. 

The states taking action: 

New Jersey:  

Assemblyman Clinton Calabrese initially introduced A5196 to regulate sweepstakes gaming, but this has now been replaced by A5447. The new bill proposes a complete prohibition of the sweepstakes model and introduces strict penalties for unlawful gambling operations. 

Mississippi:  

SB2510, which bans online sweepstakes and classifies violations as a felony, has cleared both chambers. However, the bill’s passage has become more complex due to added language that would legalize mobile sports betting. 

Maryland: 

SB860, which aims to ban sweepstakes gaming and prevent those who support such operators from obtaining gambling licenses, passed the Senate with a unanimous 47-0 vote and is now pending House approval. 

Connecticut: 

SB1235 seeks to ban sweepstakes gaming and Lottery courier services. The state’s recent enforcement action against High5Games could give this legislation renewed momentum. 

New York: 

Senator Joseph Addabbo Jr. has introduced S5935, which would prohibit online sweepstakes casinos. A companion bill, AB6475, is also advancing through the state assembly. 

Nevada: 

While Nevada’s SB256 does not explicitly target sweepstakes gaming, it strengthens penalties for illegal gaming activities and extends liability beyond state borders—an indirect threat to sweepstakes operators. 

Florida: 

SB1404 and HB953 propose expanding the state’s gambling prohibitions to include online betting. If passed, these bills could significantly impact the sweepstakes gaming industry in Florida. 

Impact on the iGaming industry 

• Sweepstake operators: Compliance is becoming more challenging for businesses in this space, and adapting to stricter regulations will be essential to long-term sustainability.  

• Licensed iGaming providers: The crackdown on sweepstakes gaming could benefit licensed operators by reducing competition from unregulated entities. 

• Affiliates and service providers: Companies supporting sweepstakes gaming operations may need to reassess their partnerships and revenue streams.  

Industry response 

The Social and Promotional Gaming Association (SPGA) has voiced concerns about the proposed legislation, particularly in New York. The association argues that these bills conflate legal promotional sweepstakes with gambling, potentially jeopardizing businesses operating within legal boundaries 

Looking ahead 

As more states consider similar legislation, the future of sweepstakes gaming in the US remains uncertain. Industry stakeholders should closely monitor these developments and prepare for potential changes in the regulatory landscape. 

The growing momentum behind sweepstakes gaming prohibition underscores the need for clear regulations and consumer protections in the rapidly evolving iGaming sector. As the industry continues to mature, finding the right balance between innovation and responsible gaming practices will be crucial for its long-term sustainability and growth.