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This strategy by state gaming regulators is working to get Sweepstakes Casinos out

Sports Writer

Publish Date: Jul 16, 2025

Fact checked by: Sara Jane Gamelli

Key Points

As many as 10 states have issued cease and desist orders to sweepstakes casino operators
Some states have toyed with laws to prohibit sweepstakes and social casinos
California to hold hearing later this month on the issue in that state

News in the gaming industry has shifted in recent months to the topic of so-called "sweepstakes casinos." These platforms are being scrutinized, so much so that some states have passed bans on them.

But a different strategy is proving successful with sweepstakes casinos: threats. Many states are sending cease-and-desist letters to sweepstakes casino operators in an effort to rid them of the unregulated headache.

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Sweepstakes casinos offer casino-style games on mobile apps without the need for funding from a financial source. If a consumer "wins" in the slots or other casino games, it's in the form of a digital currency like a coin or token.

Those digital currencies may later be redeemed for cash. That has many regulators in many states flagging sweepstakes casinos as illegal gaming.

Here is a partial list of states to have sent cease-and-desist letters to at least one sweepstakes or social casino platform:

Arkansas
Colorado
Louisiana
Maryland
Michigan
Mississippi
Montana
New Jersey
New York
Ohio
West Virginia

A handful of the states listed above have gone on to pass prohibitions, such as Louisiana, Montana, and New Jersey.

In Louisiana, the governor vetoed the ban. He went on to order his state law enforcement to send cease and desist orders to get sweepstakes casinos out. Ohio is considering a legislative ban.

California poised to make a decision on sweepstakes casinos

California is the largest economy in the U.S., and the seventh-largest economy in the world. Professionals in the gaming industry watch California closely.

The state has yet to legalize commercial online casinos or sportsbooks. Recently, lawmakers held a hearing on a bill that would ban sweepstakes casinos, which are prevalent in the state.

Tribal nations are generally aligned against sweepstakes casinos, even as some of them operate mobile applications that are much like a sweepstakes platform.

Next month, California will hold a hearing on a bill that would ban sweepstakes and social casinos in the state. A social casino is similar in operation, in that it uses a dual currency system to get around the laws on gambling real money.

The preponderance of sweepstakes casinos underscores the fact that consumers in the U.S. with an interest in casino gambling are seeking outlets for their activity. Many of the operators are open about their operations, and when confronted with orders to cease, have done so.

Still, it remains to be seen if legal online casino gaming will expand or be restricted.

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