Sweepstakes casinos vs. licensed online casinos
Licensed real-money online casinos are legal in 7 states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia. Sweepstakes casinos, which use two kinds of virtual coins to argue they are not gambling, operate in many other states, but 16 states have banned them and their status is disputed in 20 more.
How they differ
| Licensed online casino | Sweepstakes casino | |
|---|---|---|
| Legal basis | Licensed under a state law that authorizes online casino gambling | Operates without a gambling license, relying on sweepstakes and promotion law |
| What you play with | Real money, deposited and withdrawn | Two currencies: coins bought for free play, and prize coins given away that can be redeemed for cash |
| Where | Only inside a state that licenses it, checked by geolocation | Most states, except where banned or where the site chooses not to operate |
| Regulator | State gaming regulator licenses the operator and tests the games | No state gaming regulator, except where a ban is enforced |
| Taxes | Pays a state gaming tax on revenue | No state gaming tax |
| Player protections | State rules on age checks, deposit limits and self-exclusion | Set by each site; not covered by state self-exclusion programs |
| Getting paid | Withdraw winnings from your account balance | Redeem prize coins after identity checks and any play-through rules the site sets |
How the sweepstakes model works
Players buy packs of one currency, usually called gold coins, which have no cash value. The packs come with a bonus of a second currency, often called sweeps coins, which can also be had free through daily log-in bonuses or a mailed request. Sweeps coins played on casino-style games can be redeemed for cash or gift cards.
The legal argument rests on that free route: a sweepstakes is legal in most states if no purchase is necessary to enter. States that ban sweepstakes casinos say the free route is a formality and the games are online gambling without a license. Licensed online casinos and tribes have pushed for the bans.
Where sweepstakes casinos are banned
| State | Banned since |
|---|---|
| Maine | Jul 29, 2026 |
| Indiana | Jul 1, 2026 |
| Tennessee | May 22, 2026 |
| California | Jan 1, 2026 |
| New York | Dec 5, 2025 |
| Connecticut | Oct 1, 2025 |
| Montana | Oct 1, 2025 |
| New Jersey | Aug 15, 2025 |
| Utah | May 7, 2025 |
| Michigan | Jan 2024 |
| Delaware | |
| Hawaii | |
| Louisiana | |
| North Carolina | |
| West Virginia | |
| Wyoming |
Sweepstakes casino status in every state →
Where online casinos are licensed
Online casino status, launch dates and tax rates →
Questions
Are sweepstakes casinos legal?
It depends on the state. 16 states have banned them by law or regulator action (California, Connecticut, Delaware, Hawaii, Indiana, Louisiana, Maine, Michigan, Montana, New Jersey, New York, North Carolina, Tennessee, Utah, West Virginia and Wyoming). In most other states no law addresses them directly, and regulators and courts disagree on whether the two-currency model is gambling.
What is the difference between a sweepstakes casino and an online casino?
A licensed online casino takes real-money bets under a state license and pays state gaming tax. A sweepstakes casino sells coins for free play and gives away a second currency that can be redeemed for prizes, and claims that because no purchase is needed to get prize coins, it is a legal sweepstakes rather than gambling.