Sweepstakes promotional law is the US legal framework that lets operators like Stake.us, Chumba and Pulsz run casino-style games in most states without holding a gambling licence. The structure rests on federal “no purchase necessary” sweepstakes rules combined with state-by-state sweepstakes statutes, executed through a dual-currency Gold Coin and Sweeps Coin model that we walk through below under our review methodology. Eight states banned the dual-currency variant in 2025-2026, and the legal map is still moving.
What the US Sweepstakes Promotional Law Framework Means
The US sweepstakes promotional law framework combines federal “no purchase necessary” requirements with state sweepstakes statutes, allowing operators to offer casino-style games using a dual-currency model — a workaround structure rather than a licensed gambling regime. There is no central regulator, no nationwide register and no standardised licence number to verify.
At the federal layer, 15 USC §1331 and related statutes require any “sweepstakes” promotion to offer a free entry route that does not require payment. The Federal Trade Commission oversees deceptive-practice claims on top of that mandate, and historic postal sweepstakes rules established the template that today’s dual-currency casinos copy.
The state layer is where the model actually lives or dies. Every state has its own sweepstakes statute. Some require a permit and bond; some exempt promotions below a value threshold; and several have now banned the dual-currency variant outright. That patchwork is the reason an operator can be perfectly legal in Texas and effectively prohibited in Washington at the same moment.
What sweepstakes promotional law is not: it is not a gambling licence comparable to a state iGaming authorisation, an offshore Curaçao licence, or a tribal compact. Operators do not file with a gambling regulator and they are not audited the way a licensed casino is.
How Dual-Currency Sweepstakes Casinos Operate
The dual-currency model is the engine of US sweepstakes casinos. Players hold two separate balances: Gold Coins for free play with no cash value, and Sweeps Coins that can be redeemed for cash prizes or gift cards.
Gold Coins are purchased in packages and can be used to play slot-style, table and live-dealer games purely for entertainment. They never leave the platform as money. Sweeps Coins are bundled free of charge with each Gold Coin package — never sold directly — and that “free” status is what keeps the structure outside most state gambling definitions.
To remain compliant with the federal No Purchase Necessary mandate, every operator must also offer an Alternative Method of Entry (AMOE). The most common channel is a mail-in postcard sent to a designated address; some operators accept social-media posts or customer service requests. Players who use the AMOE route can accumulate Sweeps Coins without ever buying a Gold Coin package.
The Social and Promotional Games Association (SPGA), the industry’s trade body, frames this structure as a legitimate promotional sweepstakes that “operates within well-established legal frameworks.” State regulators in the 2025-2026 ban wave have argued the opposite — that once Sweeps Coins are redeemable for cash, the activity meets each state’s statutory definition of gambling regardless of how the coin packages are marketed.
The 2025-2026 State Ban Wave
Sweepstakes casinos moved from regulatory curiosity to legislative target between May 2025 and March 2026. Eight states enacted statutory bans on the dual-currency model in that window, with Montana opening the wave and Indiana closing it (so far).
Montana passed SB 555 in May 2025, becoming the first state to ban “online casinos, by whatever name known, that transmit or receive gambling information and pay out in any currency.” Connecticut followed with SB 1235 in June 2025, prohibiting sweepstakes promotions that simulate online casino gambling or sports wagering. Nevada’s SB 256 — also June 2025 — strengthened penalties for unlicensed online gambling and prompted most operators to cease serving Nevada residents.
The summer escalation continued. Louisiana’s Attorney General concluded in a July 2025 opinion that “online sweepstakes casino businesses” constitute illegal gambling, after which the Louisiana Gambling Control Board sent 40 cease-and-desist letters. New Jersey enacted A 5447 in August 2025, effectively banning real-money sweepstakes via stricter promotion requirements. California’s AB-831 followed in October 2025.
The headline ban came from New York. Governor Kathy Hochul signed S5935A in December 2025, banning operating, conducting and promoting “online sweepstakes games” outright. The legislation built on Attorney General Letitia James’s March 2025 cease-and-desist wave against 26 sweepstakes platforms, executed jointly with NY State Gaming Commission Chair Brian O’Dwyer and bill sponsor Senator Joseph Addabbo.
Indiana extended the trend in March 2026, becoming the first state to explicitly prohibit “dual-currency sweepstakes casinos” effective 1 July 2026. The Indiana statute targeted the model itself rather than sweepstakes promotion broadly — a distinction that other states are likely to copy in 2026 sessions.
States With Regulator Enforcement (No Statute Yet)
A second tier of states has moved against sweepstakes casinos through regulator action rather than legislation. Cease-and-desist letters force operator exits without requiring a bill to pass — and several state attorneys general have used this route aggressively.
Arizona, Delaware, Maryland, Michigan, Minnesota, Mississippi, Pennsylvania, Tennessee and West Virginia have all issued cease-and-desist letters to sweepstakes operators since 2025. The West Virginia Attorney General went further and issued subpoenas. Illinois escalated in February 2026, sending cease-and-desist letters to 65 operators at once — only two initially complied, but more followed through March.
Michigan, Washington and Idaho effectively operate as no-go states under existing law that predates the 2025 wave. Reputable operators have geo-blocked these three for years, and courts have upheld Washington’s prohibitive interpretation.
Florida is the wild card. State Representative Berny Jacques refiled an 86-page sweepstakes ban as HB 591 for the 2026 legislative session after a similar bill failed in 2025; the measure also strengthens the Seminole tribe’s gambling monopoly. Mississippi and Maryland legislators ran ban bills in 2025 that did not pass, but their state regulators have continued sending cease-and-desist letters in the interim.
Industry Pivot — Legalize-and-Regulate Strategy
The pressure has prompted a strategy shift inside the sweepstakes industry. Rather than fight every ban bill, operators and the SPGA have begun pushing toward a “legalize and regulate” framework that would bring the dual-currency model under licensed oversight similar to iGaming.
Two industry tailwinds make this possible in 2026. First, prediction markets like Polymarket and Kalshi have absorbed much of the regulatory spotlight that previously fell on sweepstakes — giving operators breathing room. Second, the glut of gambling legislation moving through state houses creates entry points where a regulated sweepstakes framework can be slotted in.
VGW, the parent of Chumba Casino, LuckyLand Slots and Global Poker, has been the most visible operator-side response. VGW voluntarily withdrew from Delaware in April 2025, then terminated sweepstakes operations in New York, Nevada, Connecticut, Washington, Michigan and Idaho across the year. The group also pulled out of Canada in 2025 to concentrate resources on the US fight.
Smaller operators have either followed VGW out of banned states or rebranded toward state-licensed social casino models that do not redeem Sweeps Coins for cash. Stake.us, Pulsz, McLuck, High 5 Casino and others continue to operate in the majority of US states that have not enacted a ban.
What This Means for Players
For US players, the practical question is whether sweepstakes casinos remain legal in your specific state today. The answer is “probably yes in most states, definitely not in eight.” Every major operator publishes a restricted-jurisdictions page in its terms of service; that is the authoritative source for any given brand.
If your state has banned the dual-currency model — Montana, Connecticut, Nevada, Louisiana, New Jersey, California, New York or Indiana (from 1 July 2026) — major operators will geo-block your account via IP, residency and payment-method checks. Attempting to play from a banned state typically triggers an immediate account suspension and forfeiture of any Sweeps Coin balance.
For players who want a fully licensed and audited gambling environment, regulated alternatives exist outside the sweepstakes model. Players researching the strictest licensed framework should review the UKGC’s tier-one alternative, while Canadian residents have access to Ontario’s regulated iGaming framework — the regulator under which VGW chose to exit rather than license, a useful comparison point for how the dual-currency model fits (or does not fit) inside a licensed regime.
Frequently Asked Questions
Are sweepstakes casinos legal in the United States?
What is the difference between Gold Coins and Sweeps Coins?
Why are some states banning sweepstakes casinos?
Can I play sweepstakes casinos if my state has banned them?
Bottom Line
Sweepstakes promotional law is best understood as a federal-plus-state framework that lets operators run casino-style games without a gambling licence — supported by the dual-currency Gold Coin and Sweeps Coin mechanic. The model is genuinely legal in most US states, but the 2025-2026 statutory ban wave has redrawn the map quickly and unevenly.
Treat the framework as live and moving rather than settled. Check your state’s status before signing up, watch the SPGA-led legalize-and-regulate push, and remember that a sweepstakes operator is not a licensed casino — there is no audit register and no state gambling regulator standing behind the games.
