Connecticut becomes second US state to ban sweepstakes casinos
Governor Ned Lamont has approved new legislation making Connecticut the second state to outlaw sweepstakes casinos. Residents will no longer have access to these platforms from 1 October 2025. Concerns regarding the effects of sweepstakes casinos on players and the larger online gambling industry are the focus of the recently passed Senate Bill 1235.
Understanding sweepstakes casinos
Sweepstakes casinos are online platforms where users play casino-style games, such as slots, blackjack, and poker, using virtual currency. These platforms operate on a “sweepstakes” model, allowing players to redeem in-game currency for cash prizes, often without making a purchase.
Unlike standard online casinos, sweepstakes sites offer free-to-play options and rely on “sweepstakes entries” that are often gifted or won through gameplay. This setup enables them to circumvent strict gambling laws in many states. These platforms gained popularity during the pandemic as people sought online entertainment with the possibility of real rewards without the risk of losing real money.
Connecticut’s landmark decision
Connecticut’s SB 1235 targets sweepstakes and promotional games that simulate casino play or sports betting. The legislation mandates that only licensed operators can promote or conduct such games.
The law takes effect on 1 October 2025. Running or promoting an illegal sweepstakes operation will be classified as a Class D felony. Convicted operators could face up to 5 years in prison and a $5,000 fine, serving as a strong deterrent.
Political and legal journey of SB 1235
Connecticut’s Senate Bill 1235 received unanimous legislative support, passing 146-0 in the House and 36-0 in the Senate, indicating strong bipartisan agreement. Governor Ned Lamont signed the bill, reinforcing his administration’s commitment to regulating gambling and protecting consumers.
The key provisions of the bill include prohibiting unlicensed sweepstakes and simulated online gambling, restricting third-party lottery couriers, allowing bets on Connecticut college teams for tournament wins (but not individual games), and enhancing the authority of the Department of Consumer Protection (DCP).
Reactions from Industry Stakeholders
Department of Consumer Protection’s Commissioner Bryan Cafferelli supported the bill, stating it would “improve our regulatory oversight” of the gaming sector. This indicates the state’s intent to tighten control over unregulated gambling.
The Social Gaming Leadership Alliance (SGLA), led by VGW, opposed the bill. Executive Director Jeff Duncan called the legislation “disappointing,” citing a lack of industry dialogue. He also criticised the process as “hastily passed” and warned it could benefit the black market while stifling innovation, competition, and consumer choice.
Duncan noted, “It is disappointing that Connecticut residents have lost access to popular, free-to-play online games enjoyed by millions nationwide.”
Consequences for sweepstakes operators
Due to regulatory pressure, big firms like VGW and Stake.us had already stopped operating in Connecticut before the regulation went into force. Jobs are lost, tax revenue opportunities are diminished, and consumer choices are reduced as a result of these exits. Legislators in Connecticut, however, think the enhanced regulatory clarity justifies the trade-off.
Sweepstake laws in other States
Montana banned sweepstakes casinos last month, becoming the first state to do so. Connecticut followed swiftly. Governor Jeff Landry of Louisiana vetoed a similar bill, deeming it unnecessary. The SGLA viewed this as a victory for common sense and player choice.
New York passed a bill targeting sweepstakes, leading many platforms to exit. New Jersey is considering similar legislation. Washington and Idaho already have stringent laws that effectively prohibit sweepstakes platforms, even without specific bans.
