Last summer, New York Attorney General Letitia James sent cease-and-desist letters to 26 online sweepstakes casinos operating within New York. This led to the likes of Stake.us and Chumba Casino all having to exit the state, before Bill S5935A was then officially signed into law that December. It was a big blow for the billion-dollar iGaming vertical, but sweepstakes casinos have kept a strong hold on the US market ever since, despite New Yorkers no longer being able to access them.
New York Opted to Ban ‘Illegal’ Sweepstakes Casinos Following Regulatory Concerns
Since around 2020, sweepstakes casinos, which follow a free-to-play sweepstakes model, have completely exploded in popularity throughout the US.
However, six months ago New York became one of the first major states to pass an anti-sweepstakes casino bill into law, meaning operators that use a dual-currency coin system or simulate casino play will be subject to fines up to $100,000.
Attorney General James said that “Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” and that New York’s move against sweepstakes casinos is designed to “protect New Yorkers”.
New York State Gaming Commission Chairman Brian O’Dwyer also labeled these casinos as “unscrupulous, unsecure, and unlawful” while contributing to the state’s illegal gambling market problem.
And half a year after the ban was implemented, the sweepstakes casino market has lost a serious chunk of revenue that was previously flowing in from New York, which had hundreds of thousands of active players.
Essentially, the belief from New York lawmakers was that sweepstakes casinos mimic real-life gambling too closely, even though they’re technically free-to-play sites.
Players inside these casinos are given the option to purchase Gold Coin & Sweeps Coins packages in exchange for real money, and Sweeps Coins can be exchanged for prizes like gift cards and cash transfers if you collect enough of them.
In the eyes of New York lawmakers, the dual-currency virtual coin system is effectively functioning like a legal loophole, with players able to use Sweeps Coins as a substitute for cash.
This ultimately led to the major statewide crackdown on sweepstakes casinos in order to protect players.
Throughout the US, there’s even a growing number of player-filed lawsuits being aimed at sweepstakes casinos from individuals who claim that the Sweeps Coins model is exploitative and has cost them money.
One thing for sure is that New York’s influence has been felt throughout this popular iGaming vertical now that the state has effectively pulled the rug on sweepstakes casinos, as more states have also opted to pass bans.
Indiana and Maine Become First States of 2026 to Ban Sweepstakes Casinos
Following on from New York’s and California’s sweepstakes casino ban, both Indiana and Maine recently became the first states of 2026 to outlaw sweepstakes casinos.
Governor Mike Braun signed HB1052 into law earlier this March, meaning Indiana’s ban on sweepstakes casinos will go into effect next month.
Maine became the second state of the year to pass an official ban soon after that, with Gov. Janet Mills putting pen to paper on the state’s Legislative Document 2007 in April.
Florida, Oklahoma, and several other states are also pushing for their own sweepstakes casino bans currently, some of which were no doubt influenced by New York’s movement last year.
Some Sweepstakes Operators Are Adapting to New York’s Restrictions
Almost every major sweepstakes casino operator has now exited New York.
Interestingly, though, there are still a few sweepstakes casino-style operators active within the state.
Operators like Acebet have adapted to NY’s Bill S5935A by finding new ways to play for users, including a legal workaround where residents of New York can receive Sweeps Coins by purchasing ‘physical goods’ like a pack of cards from the site’s virtual store.
Other operators have taken a slightly safer legal approach, staying active in New York but only allowing players to use Gold Coins across available games, which can’t be redeemed for prizes.
Is There a Way Back for Sweepstakes Casinos in New York?
For the foreseeable future, there won’t be a way back for traditional online sweepstakes casinos in New York, much to the disappointment of the sweepstakes fanatics there.
That said, sweepstakes casinos are still legal in 33+ other states in the US, and it will likely remain that way now that most state lawmakers have shifted their focus to prediction market gambling sites.
The only way that sweepstakes casinos would be able to regain official access to New York would be through either changing their existing sweepstakes models or by cutting a tax revenue deal, much like how one worth upwards of $20 million was attempted with Indiana.
Unless future changes are made, New Yorkers will have to rely on legal loopholes, like what Acebet is using, or take advantage of free play-only sweepstakes operators where prizes aren’t available.
