Montana Becomes 1st State to Ban Sweepstakes Gambling Sites

Sweepstakes online casinos have long operated in a murky grey area of online gaming, and although several states have expressed displeasure over the sites, Montana has become the first state to pass legislation against them.

Montana Lays Down the Law

Governor Greg Gianforte signed Senate Bill 555 into law last week, which will prohibit sweepstakes casinos from operating in the Treasure State. The law will go into effect on October 1st of this year.

Some operators, like Virtual Gaming Worlds (VGW), the parent company of popular sweepstakes sites like Chumba Casino and Luckyland Slots, have been proactive in exiting the state, thus avoiding criminal penalties, in which the owners could face fines of up to $50,000 and 10 years in prison.

Montana is the first to declare the sites illegal, although several states have had discussions on doing the same. Mississippi, Florida, Arkansas, and Maryland have attempted similar legislation, but all bills have failed to pass muster with the state legislators.

Industry Pushback and Taxation Concerns

Online sports betting and iGaming operators have contended that the sweepstakes operators cannibalize their business and do not abide by the strict regulations imposed by state gaming authorities. This directly affects the states themselves, as the sweepstakes companies are not licensed and, therefore, do not pay taxes on revenues.

Senate Bill 555 does not specifically name the sweepstakes operators but defines the prohibition as “any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”

Many of the sites grant an initial quantity of tokens, sometimes called Gold Coins or Sweeps Coins, the currency used to operate the digital slots or games being offered. However, once those tokens are expended, customers can pay for more tokens and can ultimately win cash prizes.

Sweepstakes Trade Group Critical

The Social and Promotional Games Association (SPGA) criticized the new law, and a spokesperson stated:

“Montana just criminalized everyday digital promotions with a law so broadly written it fails to name what it bans. It’s a dangerous precedent that could undermine consumer trust, business innovation, and long-standing legal marketing practices.”

The law points to operators using dual currency to circumvent the law. The Montana legislature attempts to clarify which operators are in violation of the new law by the following:

“The term internet gambling includes online casinos, by whatever name known, which constitute internet gambling and thereby are prohibited. This includes but is not limited to any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”

SPGA Counters with Broader Criticism

However, an SPGA spokesperson countered and stated, “Montana’s lawmakers have taken a reckless step, ignoring the economic and consumer consequences, and diverging from states like Arkansas, Maryland, Mississippi, and Florida, which have all rejected similar bans in 2025.”

Louisiana, Connecticut, New Jersey, and New York currently have legislation banning sweepstakes operators from their respective states, but as of this writing, none of those bills have passed.