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Analysis · Law and licensing

Are sweepstakes casinos gambling? The prize, chance and consideration test, the dual-currency model and the state bans

Published 2026-10-09Updated 2026-10-13By the CryptoGuardz Register Desk8 min read17 sources

Photo: Colin Lloyd / Unsplash

In short, from the documents

Are sweepstakes casinos gambling?

Sweepstakes casinos say free entry removes consideration, one of gambling's three elements. Six states disagree by statute: California, New Jersey, Montana and New York in 2025, Louisiana and Maine in 2026. Florida, Tennessee, Mississippi, Maryland and Connecticut have acted through lawsuits, letters or settlements. Most states have no specific law.

Piece updated 2026-10-13Reviewed by CryptoGuardz Register Desk, editorial desk

Six US states had banned dual-currency sweepstakes casinos by statute on 8 October 2026: California, New Jersey, Montana and New York in 2025, and Louisiana and Maine in 2026. In those states, the law now says the model is gambling or a prohibited game. Florida, Tennessee, Mississippi, Maryland and Connecticut have gone after operators through lawsuits, letters or settlements without a new statute. In most of the other states, the site's state data found no specific law either way.

Sweepstakes casinos argue that they are not gambling because one element of gambling is missing. This page sets out that argument, the model it rests on, and what each state has done, with each position stated as that state's. It is not legal advice.

What makes something gambling under US law?

Three elements, usually: a prize, chance and consideration. The Supreme Court put it this way in 1954, about the federal lottery statute:

All the parties agree that there are three essential elements of a "lottery, gift enterprise, or similar scheme": (1) the distribution of prizes; (2) according to chance; (3) for a consideration.

FCC v. American Broadcasting Co., 347 U.S. 284, decided 5 April 1954

Each state has its own wording, but the same three pieces recur. Take away any one and the activity is, on this test, not a lottery. A free raffle has prize and chance but no consideration. A paid chess tournament has prize and consideration but, arguably, no chance.

How does the dual-currency sweepstakes model work?

Two coins. Players buy one currency, usually called Gold Coins, which has no cash value and is used to play casino-style games for fun. With the purchase, or for free by mail or a daily bonus, they get a second currency, often called Sweeps Coins, which can be played and then redeemed for cash or prizes.

A hand holding up a plain white envelope against a pale blue wall — Illustration: a letter. Sweepstakes operators offer a free way to get the second currency, often by mail, which is part of how they argue the games are not gambling. Photo: erica steeves / Unsplash

Tennessee's Attorney General described it on 29 December 2025 as casinos that use "two types of virtual currencies, one of which can be redeemed for cash or other real-world prizes." New Jersey's 2025 statute names "a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent."

The operators' legal argument goes to the third element. Because the redeemable coins can be obtained without buying anything, they say there is no consideration: nobody has to pay to enter the sweepstakes. The states that have legislated reject that argument for this model. New Jersey still allows sweepstakes, but section 3 requires, among other things, "a method of entry to participate in the sweepstakes at no cost to the participant".

Which states have banned sweepstakes casinos?

From the site's state data, each status read on the state's own legislature, governor, regulator or attorney general page:

State	Law	Signed	What the source says
New Jersey	P.L.2025, c.128 (A5447)	15 Aug 2025	Paid-entry sweepstakes, dual currency included, is unlawful gambling
California	AB 831 (2025)	11 Oct 2025	Signed; Penal Code 337o in force 1 Jan 2026, see AB 831
New York	S5935-A, chapter 605	5 Dec 2025	Bars dual-currency online sweepstakes; $10,000 to $100,000 fines
Montana	MCA 23-5-112(23), 2025 amendments	Not verified	"online casinos, by whatever name known" are prohibited
Maine	LD 2007, chapter 645	6 Apr 2026	Civil violation; $10,000 to $100,000 fines
Louisiana	HB 883, Act 182	15 May 2026	Dual-currency casino games are "gambling by computer"; effective 1 Aug 2026

A paper map of the United States with green pins stuck in it — Illustration: a pinned map of the US. Whether sweepstakes casinos are allowed is decided state by state, as the table in this section shows. Photo: Nico Smit / Unsplash

New Jersey's section 2 says that offering or conducting a sweepstakes "in which a person present in New Jersey may participate by paying" shall "constitute unlawful gambling in violation of Article IV, Section VII" of the state Constitution. The act sets penalties of "not more than $100,000 for the first offense and not more than $250,000 for the second and each subsequent offense."

Louisiana's Act 182 amends R.S. 14:90.3 so that an internet game that "utilizes a dual-currency system of payment" and "simulates any form of gambling constitutes gambling by computer". Montana's code, as amended in 2025, defines internet gambling to include "online casinos, by whatever name known", which "are prohibited", excluding online casinos that use no currency of any kind.

Two more are pending confirmation. Indiana's HB 1052 conference report lets the Gaming Commission levy a $100,000 civil penalty for knowingly running a dual-currency sweepstakes game, but enactment was not confirmed. Oklahoma's SB 1589 became law over the Governor's veto on 14 May 2026, and whether it reaches sweepstakes casinos is not verified because the text was not read.

Which states are enforcing without a new law?

State	Who acted	Date	What they said or did
Connecticut	Department of Consumer Protection	29 May 2025	Settlement with High5Games over an "unlicensed sweepstakes casino"
Mississippi	Gaming Commission	17 Jun 2025	Cease-and-desist letters
Tennessee	Attorney General	29 Dec 2025	Letters to "almost forty online sweepstakes casinos"
Florida	Attorney General	19 Aug 2026	Suits against Stake, Chumba Casino, LuckyLand, Global Poker
Maryland	Lottery and Gaming	Read 8 Oct 2026	Cease-and-desist list includes Stake.us, Chumba, McLuck
Washington	Gambling Commission	Read 9 Oct 2026	Virtual currency wagering "likely" illegal gambling

Mississippi's notice said "there are no legal exceptions for online sports books or so-called 'sweepstakes' casinos." Tennessee's Attorney General said the model "constitutes an illegal lottery prohibited by the Tennessee Constitution." Washington's Gambling Commission says games where players wager virtual currency for more virtual currency "are likely to constitute illegal gambling", and that gambling is illegal unless a statute specifically allows it. A trade-press report of a 2025 Connecticut statute, SB 1235, could not be checked on the General Assembly's site: not verified.

Florida's suits were filed in Hillsborough County, and no ruling was found. The Stake.us side of that case, with the operator's own state exclusions, is in Stake.us by state.

Are sweepstakes casinos legal in my state?

Check the state page. The US state guide records each state's sweepstakes status with its source, for example New York, California, New Jersey, Louisiana, Florida and Tennessee. A state marked "no specific law found" is a state where this pass found no statute or enforcement aimed at the model. It is not a finding that the model is legal there: the general gambling statute still applies, and the three elements above are what a court would weigh.

The site also runs document checks on 25 sweepstakes brands, recording the operator name, whether a register applies and what the terms say. Among them: Stake.us, Chumba Casino, McLuck, Pulsz, Wow Vegas, High 5 Casino and Fliff, a social sportsbook on the same two-currency model. None holds a state gambling licence, because no state licenses this product.

What this does not show

California's AB 831 is now read in full in a separate post. Whether courts will accept the free-entry argument in any state; no ruling on it was found. The 2026 sessions in states other than those listed. Each status here comes from the site's state data, retrieved 8 October 2026, and changes as legislatures meet.

Quick answers

Are sweepstakes casinos legal?

Not in six states that banned the dual-currency model by statute by 8 October 2026: New Jersey, California, New York, Montana, Maine and Louisiana. See the US state guide.

Why do sweepstakes casinos say they are not gambling?

They say a free way to get the redeemable coins removes consideration, one of the three elements the Supreme Court listed in 1954: prize, chance and consideration.

What is a dual-currency sweepstakes casino?

One currency is bought and has no cash value; the second can be redeemed. Tennessee's Attorney General calls the model "an illegal lottery".

Which sweepstakes casinos have been sued?

Florida's Attorney General sued operators including Stake, Chumba Casino, LuckyLand and Global Poker on 19 August 2026. See the Stake.us check.

Where can I get help with gambling in the US?

The National Problem Gambling Helpline is 1-800-MY-RESET (1-800-697-3738), with call, text and chat. More options are on the responsible gambling page.

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Sources

About this piece

Compiled by the CryptoGuardz register team from the sources listed above. Research and drafting are AI-assisted and reviewed by a named editor before publication. Nothing here is a recommendation to gamble. If a figure or a reading is wrong, tell us and the correction is logged in public.