Human nature
People have been gambling since before the US was established as a nation. In fact, it could be argued that without lotteries and gambling, the colonies would never have gotten off the ground. The first settlements in the country were possible thanks to the likes of London’s Great Standing Lottery of 1612, which was established to raise funds for Virginia’s struggling Jamestown colony. Created by the Virginia Company of London (UK), its purpose was to fund the shipping of vital supplies and new settlers, and its revenue was famously described as the colony’s “real and substantial food”.
Gambling has since been variously outlawed, left to proliferate, outlawed again, and legislated for and against. Depending on where you live in the country, the picture can still be pretty unclear over 400 years later. While it appears that gambling and gaming are part of human nature, US authorities have not given gambling an easy passage. When the Supreme Court struck down PASPA’s federal ban on sports betting, many in the pro-gambling lobby hoped restrictions would ease generally. While this has proved true for sports betting, the same cannot be said for casino gambling, which is still regarded as taboo by many of the more conservative states.
Legislating to prevent harm
Unlike similar ‘western’ jurisdictions that have taken the attitude that ‘as people are going to gamble, they should do so safely’, most US states have been much less pragmatic. To this day, only seven states (New Jersey, Pennsylvania, Michigan, Delaware, West Virginia, Rhode Island and Maine) have regulated in favor of online casino gambling for real money. Unsurprisingly, in the vacuum, alternatives have emerged that exploit loopholes in the laws that regulate gambling. Social and sweepstakes casinos stepped into the void, and it seemed as though (for a while at least), all American residents were going to be able to legally access online casino games by one form or another.
Unfortunately, that freedom appears to be short-lived, and legislators are now cracking down on sweepstakes casinos, even though they operate under a different set of rules than real-money casinos. The question is: why are they doing it and why? But before we speculate on their motives, it is worth looking at how sweepstakes casinos have been able to operate in the first place.
Looking for loopholes
US law has a strict definition of what constitutes gambling. A prize, an element of chance, and a cost to enter are required. Sweepstakes casinos have gotten around the rules by using a dual-currency system of Gold Coins and Sweeps Coins and offering no-purchase-necessary routes through generous daily coin giveaways. While many people play for fun and glory alone, sweepstakes casinos also let you use Sweeps Coins to play for real prizes. While the vast majority of players only use the no-purchase-necessary route, some buy additional currency.
At first, social and sweepstakes casinos operated pretty much under the radar, and many legislators were prepared to turn a blind eye. However, the sector is no longer niche and is actually bigger in terms of reach and volume than its real money counterpart. They are officially the US’s fastest-growing iGaming vertical, and it is estimated that there is still substantial growth in the sector. In 2026 alone, Eilers & Krejcik estimates operators will generate around $6.5 billion.
Sorting the wheat from the chaff
Operators are undoubtedly taking advantage of a legal gray area, and while there are some fabulous sweepstakes casinos out there, there are others that are not so great. As the sector is unregulated, it can be hard for consumers to know which ones to trust. This is why online casino review site Casino.org has taken it on itself to sort out the wheat from the chaff (or the delightful from the downright dangerous). They feature a list of top sweepstakes casinos that offer free Sweeps Coins, high safety scores, and 800+ games on average.
Moving at speed
Sweepstakes casino law is moving faster than almost any other area of US gaming regulation at the moment. The site has full lists of what is available and where but also has the caveat that there are so many bills in progress that customers need to check the casino’s availability and the state’s statute before signing up or making any deposits. Some states are cracking down because they see these online casinos as a direct threat to their own regulated, commercial sector, and others because they regard them as the equivalent to gambling for real money.
California introduced an outright ban at the beginning of the year, and since then Indiana signed a ban, while Maine, Maryland, Tennessee, Minnesota, and Oklahoma moved related bills forward in their 2026 sessions. The problem is that without a regulatory framework, unscrupulous sweepstakes companies can prey on vulnerable consumers, skip age verification, and accept unlimited deposits on credit cards. Winnings may not be paid out either. This means that safe and lawful gaming companies risk being tarnished with the same brush. Many people are now advocating for lawmakers to pass legislation that ensures safety rather than implementing bans which, yet again, drive gambling underground.
The real motivation might not be as it appears
While it might appear that cracking down on sweepstakes casinos is all about citizen protection, a more cynical observer might see another motive. California had a very strong financial incentive to move against sweepstakes casinos. It risked losing billions of dollars in revenue-sharing payments from state-tribal gaming compacts, which have guaranteed Native American tribes’ exclusivity over casino-style gaming. The fear is that any online casino gambling in whatever form could lead to a flattening or reduction in their land-based revenue share payments. Across the country online sweepstakes casinos are becoming more and more popular, so it does have a feeling of trying to hold back a rising tide.
The next move
There is a feeling that the current approach is somewhat of a ‘whack-a-mole’ one. As mentioned at the start, people who want to gamble will find a way to do so, and operators will invent new, currently legal routes that let people play the games they want. Platforms are now offering pari-mutuel casino games where the winnings are determined by real horse racing results rather than random number generators and there are also fishing games. However, that is a whole other article! Suffice to say, where there is a will, there is a way. However, in the US right now, pragmatism seems to be in short supply.