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- The US sweepstakes casino market saw significant contraction in 2025 due to escalating legal and regulatory pressures.
- Multiple states enacted explicit bans, while enforcement actions and extensive litigation further squeezed the sector.
- These developments signal a challenging landscape in 2026 for operators and players alike.
In 2025, the sweepstakes casino industry in the US, once a fast-growing, “gray market” alternative to regulated, real-money online casinos, experienced a sharp decline.
Six states – California, New York, Montana, Connecticut, New Jersey, and Nevada – enacted new laws banning or restricting sweepstakes operations, with California’s ban being particularly impactful given its large market share.
Several other states, including Louisiana, West Virginia, Tennessee, Delaware, Maryland, Arizona, Mississippi, Minnesota, and Kentucky, saw increasing enforcement actions from attorneys general and gaming boards that pressured operators to exit.
Additionally, there was a surge in class-action litigation targeting major operators like VGW, Stake.us, and others, with allegations centering on illegal gambling practices and deceptive business models. High-profile personalities linked to some platforms have also been named in lawsuits, adding to the operational risks.
Can sweepstakes survive in 2026?
This regulatory crackdown means many sweepstakes casino platforms have disappeared from key states, limiting access and variety. Operators face higher compliance costs, legal risks, and shrinking revenue opportunities. Content providers like Pragmatic Play and Evolution have withdrawn or curtailed offerings, further reducing market options.
To survive, some companies launched new platforms to recapture lost ground, but the overall market contraction limits growth potential. These shifts point to a more cautious and fragmented sweepstakes landscape, impacting bettors who have used these platforms as alternatives to traditional online gambling.
Looking ahead, 2026 is expected to bring additional legislative bans and increased enforcement efforts across more states, including Iowa, Maine, Indiana, and Florida. Ongoing and new litigation will maintain pressure on operators, likely causing further market contraction.
The sector’s future will hinge on regulatory developments and the ability of operators to adapt amidst increasing legal risks, suggesting continued challenges for sweepstakes casinos in the US.
Based on reporting by Chavdar Vasilev for Gambling Insider.
