Sweepstakes Casino Laws in 2026: New Bans, Proposed Legislation, and Regulatory Trends

The legal and regulatory landscape for sweepstakes casinos continues to evolve rapidly. As sweepstakes gaming appears to have gained traction in recent years, it has also attracted increased attention from lawmakers, regulators, licensed gaming operators, and other stakeholders with differing views on how these products should be treated under state law.  

As discussed in our previous article, sweepstakes casino operators generally rely on dual-currency models and free alternate methods of entry to distinguish their products from traditional gambling. During the first half of 2026, multiple states enacted legislation directed at sweepstakes casino models, while others explored whether regulated iGaming should be expanded alongside restrictions on sweepstakes offerings. Together, these developments reflect a broader national conversation about the future of online gaming regulation and where sweepstakes casinos fit within it. Below is a summary of the latest legislative activity.

D.C. Looking at Legalizing Online Casino Gaming and Banning Sweeps Casinos. On April 9, 2026, a D.C. Councilmember introduced B26-0656, the Internet Gaming and Consumer Protection Act of 2026, which would legalize real-money online slots, poker, and table games in the District and ban sweepstakes casinos. The bill would tax online gaming at 25% of gross gaming revenue and give preference to operators that already hold a D.C. sports-betting license, such as FanDuel, DraftKings, and BetMGM. As of mid-2026, it remains under Council review.

Indiana’s HB 1052 Includes a Sweepstakes Casino Ban. Indiana’s Bill, HB 1052, effective July 1, 2026, bans sweepstakes gaming accessible online, on mobile, or through any other similar device that utilizes a dual-currency or multi-currency system of payment and simulates lottery games or casino-style gaming. The bill also gives the Indiana Gaming Commission the authority to levy a civil penalty up to one hundred thousand dollars ($100,000) against an operator or individual who knowingly uses the Internet to conduct a sweepstakes game.

Iowa Expands Regulatory Enforcement Power Over Illegal Sweepstakes. The Iowa governor signed SF 2289 on May 15, 2026, which prohibits sweepstakes in the state unless licensed or otherwise authorized by law and gives the Iowa Racing and Gaming Commission the power to issue cease-and-desist orders and seek injunctive relief against any person offering illegal sweepstakes, games of chance, gambling, or sports wagering in the state. The gambling enforcement provision took effect July 1, 2026.

Louisiana Treats Sweepstakes Gambling as Racketeering. The Louisiana governor signed two related bills, both effective August 1, 2026. HB 53 (Act 48) adds several gambling offenses, including gambling by computer and gambling by electronic sweepstakes device, to the definition of “racketeering.” HB 883 (Act 182) treats dual-currency online sweepstakes games as illegal "gambling by computer" and raises the maximum fine from $20,000 to $100,000, with up to five years in prison. It applies not just to operators but to platform providers, suppliers, geolocation providers, promoters, media affiliates, and anyone who knowingly helps run the games. Together, the bills give prosecutors more power to go after sweepstakes casinos.

Maine Bans Online Sweepstakes. Maine’s Bill, LD 2007, explicitly prohibits online sweepstakes games that use a dual-currency payment system and simulate casino-style gaming. It treats operating, promoting, or supporting such games as unlawful gambling under the Maine Criminal Code, adds a fine of not less than $10,000 and up to $100,000 for violators, and requires revocation of any state gaming license held by the violator. The bill will likely become effective mid-July 2026.

Oklahoma Overrides Veto to Ban Sweepstakes Casinos. Oklahoma lawmakers overrode the governor’s veto of Senate Bill 1589, which updates the state’s gambling statute to address sweeps casinos by adding language covering dual-currency payment systems in which currency can be exchanged for cash prizes or rewards. It applies to operators, geolocation providers, gaming suppliers, platform providers, promoters, media affiliates, and those that provide support. SB 1589 makes violations a felony, with fines of $500 to $2,000 and possible jail time. The bill is set to take effect on November 1, 2026.

Tennessee Prohibits Sweepstakes Casinos. Tennessee has expressly banned “online sweepstakes games” under HB 1885 / SB 2136, signed by the governor on May 22, 2026. The law treats operating, conducting, promoting, or supporting online sweepstakes games as a violation of the Tennessee Consumer Protection Act, enforced by the Attorney General through civil penalties and injunctive relief, and expands the AG's authority to investigate. 

What This Means

The legal landscape for sweepstakes casinos continues to evolve. Companies involved in the sweepstakes casino ecosystem, including operators, suppliers, platform providers, payment processors, geolocation providers, affiliates, media partners, promoters, and other participants, should keep abreast of legislative, regulatory, and enforcement developments in the jurisdictions where they operate or provide services. As additional states consider sweepstakes-specific legislation, periodic reviews of legal and compliance obligations may help businesses identify and respond to changes that could affect their products, services, business models, or potential legal exposure.

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE. This summary does not constitute legal advice.

 

Tina Reid, Brian Schaller & Chloé Nelsonsweepstakes, gambling, casinos