Connecticut Lawmakers Pass Sweepstakes Ban, Await Governor's Signature

A bill that would prohibit so-called sweepstakes casinos, a gaming product which critics say mimics real online casinos apps while substituting coins or tokens for real money, is one step closer to becoming law in Connecticut.

Senate Bill 1235 passed in the State House by a vote of 146-0. The bill passed in the Senate earlier this year, with mostly the same language.

Governor Ned Lamont, a Democrat who has supported legalized gaming in his state, is expected to sign SB 1235 into law. He can do so within 15 days of June 4. But if he fails to sign the bill, it will become law with or without his signature. Only a veto from Lamont can sink SB 1235.

The bill targets sweepstakes casino applications, which are available in the state for download but are not licensed or regulated. Connecticut made online casinos legal in 2021, the same year it legalized online sports betting and retail sportsbooks.

But in 2021, few observers of the gaming industry could have predicted that apps would appear that wedged between legality and alleged illegality like sweepstakes games. In a sweepstakes casino, consumers can play casino style games such as slots and table games like roulette and baccarat without placing real money at risk. Instead, they compete for digital "currency" like tokens or coins. If they win, consumers can redeem the digital "currency" for gifts or cash prizes.

SB 1235 bans any contest that utilizes dual-currency and is “not related to the bona fide sale of goods, services or property.”

SB 1235 also accomplishes several other things relating to gaming. It makes lottery ticket courier services illegal in Connecticut. Courier services allow intermediaries to buy lottery tickets for consumers who do not live in the the state. This often happens when a state lottery accumulates a large jackpot.

The bill reads that "no person shall offer a lottery ticket for resale," and "no person shall operate a ticket courier service in this state."

A handful of states have banned lottery ticket courier services, including Texas and Oklahoma.

The bill also more strictly redefines intercollegiate teams in the state for purposes of restricting betting on those school contests.

If Connecticut bans sweepstakes casinos it will become the second state to do so, following Montana. This week, Louisiana also passed a bill in its' state legislature that will ban sweepstakes casino operators, but it's waiting for a signature from the governor. Elsewhere, New Jersey, New York, and Ohio are considering sweepstakes ban legislation. Nevada is mulling a bill that bans a number of forms of unregulated online gaming activity. That bill is thought by many experts to apply to sweepstakes casinos.

Lawmakers have responded quickly to squash sweepstakes casinos after they began to pop up all over the United States, even in states that do not have legal online casinos. The primary reason is safety of consumers, a desire to regulate all gambling, and the issue of tax revenue. Sweepstakes casinos do not pay tax revenue from alleged gaming activity.

As of yet, no state has explicitly legalized sweepstakes casinos, though the several have taken the step to hound the operators of such apps. In Michigan, regulators sent cease-and-desist letters to six alleged illegal offshore and sweepstakes casinos this week.