Are Sweepstakes Casinos Gambling? Why States Are Banning Them

Sweepstakes casinos say they aren't gambling, because you can technically play for free. But you can spend real money, and you can redeem winnings for real cash prizes. A growing number of US states see that as gambling: by late 2026, more than ten had passed laws banning online sweepstakes casinos, and more than 100 class actions had been filed against operators. If you're spending money chasing prizes you can cash out, it works on you the same way any casino does.

How sweepstakes casinos work

They use two currencies:

• A play currency (like Gold Coins) that you buy and can't cash out.
• A sweepstakes currency (like Stake Cash or Sweeps Coins) that comes "free" with coin purchases, daily bonuses or a mail-in request, and that you can redeem for real money.

The legal argument is "no purchase necessary": because there's a free way to get sweeps coins, it's a promotional sweepstakes, not gambling. In reality, most people buying coins are buying a chance to win money.

States that have banned them

• Montana was first, with a ban effective October 2025.
• Connecticut and New Jersey followed in 2025.
• California's AB 831 took effect January 1, 2026, making it a misdemeanor with fines up to $25,000, and it reaches payment processors and affiliates too.
• New York signed a ban in December 2025.
• Indiana (civil penalties up to $100,000), Maine, Tennessee and Louisiana followed in 2026.
• Oklahoma's ban takes effect November 1, 2026.

Operators have pulled out of states en masse as bans hit. In August 2026, Florida's attorney general sued Stake and VGW, the company behind Chumba, along with their payment processors.

What courts are saying

In July 2026, a Minnesota federal judge refused to send a Stake.us player's case to arbitration, because under Minnesota law a contract for illegal gambling is void, and the arbitration clause goes with it. The player says he lost more than $80,000. That's a judge taking seriously the idea that this is gambling.

Do players think it's gambling?

Yes. In research by the American Gaming Association, 90% of people who visit sweepstakes sites said they consider it gambling. (The AGA represents licensed casinos, which compete with sweepstakes sites, so keep that in mind. But the number lines up with common sense.)

Self-exclusion won't follow you here

State self-exclusion lists bind licensed casinos and sportsbooks. Sweepstakes casinos aren't licensed that way, so don't count on your state list to block them. Exclude on each site directly:

• How to self-exclude from Stake.us
• How to self-exclude from Chumba Casino, including its sister sites
• Block gambling sites on every device, and watch your card statements, because coin purchases can slip past bank gambling blocks.

Block it everywhere: how to block gambling sites on your phone and computer, and how to block gambling payments at your bank.

If you're struggling right now

• Thinking about suicide (US and Canada): call or text 988, any time.
• USA: the National Problem Gambling Helpline, 1-800-MY-RESET (1-800-697-3738).
• Canada: find support by province or territory.
• Chess vs. Gambling: chessvsgambling.org is a free community that uses chess as a healthy replacement for gambling, with a Discord you can join.
• Anywhere: Gambling Therapy offers free online support in multiple languages.

This article reflects my own research and opinions, not legal advice. State laws are changing quickly; this reflects public reporting as of October 31, 2026.