It started going wrong for sweepstakes casinos in late 2024.
After years of dominance in the post-COVID market — which saw the likes of Stake, WOW Vegas, and Chumba Casino attract millions of players — these casino sites were suddenly under a lot of pressure. Why? The American Gaming Association (AGA) had decided to call them out.
In a statement, the AGA attacked sweepstakes casinos for “exploiting loopholes” and promoting unregulated gambling. It caused a huge media storm. Nobody knew at the time how quickly it would trigger a crackdown on sweeps casinos throughout the US, either.
Fast forward to today, and more states than ever have banned — or are actively looking to ban — sweepstakes casinos. Just last week, New York joined the party, introducing legislation that means Chumba Casino and other operators will be getting kicked out of the Empire State once Gov. Kathy Hochul signs the dotted line. As you might expect, sweepstakes operators aren’t taking to the news particularly well.
What we’re seeing is a mini exodus of sweepstakes casinos, and according to this round up on sweepskings, it means countless players from states like New York will no longer be able to access them. It’s a major shakeup, especially when you consider that some of the sweepstakes casinos out there have become just as — if not more — popular than regular online casinos.
New York Passes Passes Bill to Ban Sweepstakes Casinos
New York has officially dealt the sweepstakes casino industry its biggest blow yet by passing a bill to have all sites banned.
Although it’s not officially the law yet — a signature is still needed from Gov. Kathy Hochul — this signals even more bad news for sweepstakes operators.
It’s estimated that 47,000 New Yorkers currently have a sweepstakes casino account. That’s a big chunk of players, so operators like Stake and Chumba will be losing significant revenue moving forward.
Regarding New York’s crackdown on sweepstakes casinos, Attorney General James had this to say:
Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances. I thank the New York State Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.
Brian O’Dwyer from the New York State Gaming Commision also commented on what the state has been trying to achieve:
These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful. I have been very vocal about the need to crack down on these operations, and I am thrilled that Attorney General James has taken this significant step to eradicate the illegal gambling market. We encourage those of age who wish to gamble to do so with legal operators.
And it’s not just New York that’s successfully banning sweepstakes casinos. Over the past year alone, we’ve also seen Montana and Michigan implement bans on operators, while Nevada, Louisiana, Connecticut, West Virginia, and Mississippi are also actively looking to ban them, with several bills already passed and awaiting final approval.
If every bill is successfully signed, sealed, and delivered, it would create a space where sweepstakes casinos are legal in 41 out of the 50 states. It’s still a majority, but sites won’t be pulling in as much money as they were before. This has naturally got operators worried, with the Social Gaming Leadership Alliance (SGLA) — backed by many of the world’s big sweepstakes casinos — labelling the New York bill a “fundamental misunderstanding” of the sweepstakes casino industry.
The Legal “Dilemma” of Sweepstakes Casinos
The argument being put forward by sweepstakes casinos and groups representing them is that they’re not actually gambling sites, whereas a growing number of states think they are. What’s interesting about this is that there’s no clear right or wrong answer, either. For years, sweepstakes casinos have been operating in a “legal grey area” where nobody has really known what to class them as, so it’s finally coming to a head.
In a nutshell, sweepstakes casinos let you play for free. Slots, roulette, baccarat — you name it, they’re all free. Sounds fair enough, right? Well, on the surface it is — if you’re not playing with real money, it can’t be classed as gambling — but where sweeps casinos have shot themselves in the foot is by offering ‘Sweeps Coins’ for players to buy.
What millions of players do is exchange money for Sweeps Coins so that they can compete for real prizes, including cash transfers and gift cards. In a way, it’s like substitute gambling. You switch out real money for virtual coins and the objective is still the same: try to win rewards.
On a technicality, sweepstakes casinos claim it’s still not gambling because the actual bets you place are done using the Sweeps Coins, not genuine money. In a way, it’s a genius legal workaround. However, the problem for operators like WOW Vegas and Chumba Casino is that states are no longer willing to let this argument slide. They think it’s gambling, so they’re coming down hard on them.
The Crackdown on Sweepstakes Casinos Continues — But Sites Won’t Be Banned Everywhere
As things stand, sweepstakes casinos are still legal throughout most of the US.
The problem, though, is that they’re losing momentum fast with so many bills being passed against them. Sure, sites like Chumba Casino still have a strong market hold, that’s undeniable. However, the overwhelming sense now is that the next 1 to 2 years will see even more states look to ban them, potentially leading to an industry where these casinos are suddenly only legal in half the states they were previously.
Let’s not forget that gambling sites with online casinos — we’re talking FanDuel, BetMGM, and the other big-hitters — can currently only operate in 6 states. That’s much less than sweepstakes casinos, who’ve had an advantage over them for quite a while now. However, with the way the trend is moving, it looks like sweepstakes casinos might be in a similar situation not too far down the line. That is, of course, if the remaining states start to ban them, too.
Some sweepstakes players out there will be rightfully worried about the long-term future of sweepstakes casinos following what’s gone on. However, even if more states start banning sweepstakes casinos, they won’t ever disappear, at least not completely. At this stage, it’s impossible.
All of the major sweepstakes casinos have garnered millions of users, they’re huge in the mainstream, and many of them have even penned sponsorship deals with sports franchises, entertainment companies, and more. Simply put, they’re too big now. Plus, players within banned states will likely start using VPNs to access the sweepstakes casinos they like, meaning player drop-offs won’t turn out to be as bad as projected.
High 5 Casino Loses $25m Lawsuit
The problems don’t end there for sweepstakes casinos.
We’ve also witnessed a significant increase in lawsuits being filed against them over the past couple of years, with at least several players claiming they’ve felt “duped” or “tricked” by the sweepstakes model.
The most high-profile example of this was High 5’s recent lawsuit. In case you didn’t know, High 5 is a purple cladded sweepstakes casino that boasts over 500 games for players to enjoy. Over the years, the site has been rolling in money, but it lost a big chunk of that — $25m, to be exact — after losing a lawsuit at the start of 2025.
A federal jury decided to award the money to Washington players who’d been playing inside High 5 Casino, claiming that the site had been violating state gambling laws. Nobody saw that one coming, that’s for sure. And it served as a major warning to other sweeps operators that they could face similar consequences.
Bizarrely, American Idol host Ryan Seacrest has also been involved in a recent sweepstakes lawsuit. Seacrest, who signed a sponsorship deal with Chumba Casino, has been accused by California resident Aubrey Carillo of starting her gambling addiction. She saw Seacrest in ads for Chumba Casino, started using the site, lost a big amount of money, and is now suing him for it.
What happens with the Ryan Seacrest lawsuit remains to be seen. Other sweepstakes casinos will be taking notice of it, though, and it’s already led to VGW — owner of Chumba Casino and LuckyLand Slots — increasing its minimum player from 18 to 21 as a precautionary measure.
Conclusion
So, with all that said, what’s next for sweepstakes casinos?
One thing we can say for sure is that they won’t be outright banned everywhere. If you want to access one, you’ll still be able to, whether it’s from your own state or using a VPN.
However, more states will continue to boot sweeps casinos out. That’s also a given. How high the number will go is up for debate, but don’t be surprised by the end of 2027 if at least 10 more states have implemented bans.
Whatever happens in that regard, the likes of Stake and Chumba will keep charging forward.. Players are hooked on their slots, tournaments, and prizes, so they’ll never stop playing. Simply put, the demand will always be there, but it just might be on a lower scale after a growing number of states start pulling out.
Impressively, the sweepstakes casino industry will still remain a billion dollar one. At the same time, it will likely keep attracting big-name celebrities and influencers to sign sponsorship deals, too, like we’ve already seen with Drake, Paris Hilton, and countless others.
Sweepstakes “mania” might not ever reach the heights of 2020 to 2023 again — but it’ll remain a key part of iGaming for decades to come.
