5 States Moving to Ban or Restrict Sweepstakes Casinos in 2026

Sweepstakes Casinos face more regulatory scrutiny in 2026, with at least five US States planning to ban or restrict this iGaming activity.

In most US States, Sweepstakes Casinos exist in a grey area of regulation, where they are neither covered by current legislation nor meet the requirements of existing gaming laws that typically date back to the Unlawful Internet Gambling Enforcement Act (UIGEA) from 2006.  

In 2025, both California and New York introduced legislation to ban Sweepstakes Casinos. Before then, Nevada, Michigan, New Jersey, and Washington had taken action against providers of sweepstakes casinos in their respective states.

So what lies ahead for Sweepstakes Casinos in the US? Here are 5 States looking to pass legislation in 2026 that could lead to further bans on this iGaming market.

Tennessee

Earlier this year, Rep. Scott Cepicky introduced House Bill 1885. The Bill proposes that sweepstakes are a type of 'online sweepstake game' that uses virtual currency to participate. Those taking part can win prizes that can be exchanged for cash, or a cash equivalent prize and therefore should be treated as a form of online gambling.

The Attorney General (AG) in Tennessee has already made several efforts to warn Sweepstakes Casinos from targeting citizens of the state, sending cease-and-desist letters to over 40 companies in recent months. The activity by the AG has seen some of the Sweepstakes operators restrict access in Tennessee or change their business platform to a social casino model.

Indiana

Things are moving a little quicker in Indiana, where the House Public Policy Committee has unanimously approved a proposal to ban Sweepstakes Casinos. House Bill 1052, introduced by Rep. Ethan Manning, has undergone amendments to address 'multi-currency' transactions and to change penalties from criminal to civil.

Some considerations have been given to regulating Sweepstakes Casinos; however, Indiana Gaming Commission General Counsel Natalie Huffman has said she wants sweepstakes to be banned in the state. If Bill 1052 is passed, the regulator would begin issuing cease-and-desist letters to companies currently offering sweepstakes in Indiana.

Minnesota

The Senate in Minnesota has prepared legislation aimed at online sweepstakes casino platforms, by sending Senate Bill 4474 to the House before the legislative session closed on the 18th May.

SB 4474 targets the operators of Sweepstakes casinos who have largely ignored legislators in the North Star State up to now. The bill would give greater regulatory powers to authorities in the state and allow them to go after platforms, processors, suppliers, affiliates, and any hosts.

Under existing Minnesota consumer protection statutes, penalties could reach $25,000 per violation.

Iowa

Iowa is believed to be very close to passing legislation to take on unregulated online gambling in the State, which includes Sweepstakes Casinos. Senate File 2289 passed its first hurdle and is currently sat with Gov. Kim Reynolds, who is yet to declare her intentions on whether she will add her signature.

If SF 2289 is brought into law in Iowa then regulators will have the power to go after unregulated online gambling operators with cease-and-desist letters. This would include all Sweepstakes platforms that remain in an unregulated status in Iowa.