Hugely popular sweepstakes casinos are now officially banned in California and New Jersey.

It comes following increased legal scrutiny surrounding this new type of online casino, which has also seen Michigan, Montana, Connecticut, and Nevada outlaw them.

Bans are sweeping (pun intended) all across the U.S. and it appears as though VGW, the company behind Chumba Casino and Luckyland Slots, will be hit hard by revenue and player loss, as will many of the other operators.

California Becomes Latest State to Outlaw Sweepstakes Casinos

2025 has seen a handful of states outlaw sweepstakes casinos, with California leading the way.

California recently dealt the biggest blow to sweepstakes casinos yet when Gov. Gavin Newsom signed AB 831 into law after the measure was passed 79-0 in a previous Assembly floor vote on Sept. 12.

The bill itself is even co-sponsored and supported by the Yuhaaviatam of San Manuel Nation, the California Nations Indian Gaming Association, the Sports Betting Alliance and others, showing anti-sweepstakes sentiment is stronger than ever.

What this all means is that online sweepstakes casinos offering dual-currency systems that resemble gambling, typically based around ‘Gold Coins’ and ‘Sweeps Coins’; will no longer be allowed to operate in California as of 2026, with many existing sweepstakes players currently residing in the Golden State.

Sweepstakes casinos did, of course, try to fight back against California’s proposed bill, which saw the Social Gaming Leadership Alliance send an open letter to Gov. Newsom effectively pleading with him to veto it.

The argument put forward by VGW, Playstudios, and other major sweepstakes operators was that AB 831 means California will miss out on up to $300m in tax revenue annually, while also destroying legitimate businesses in the process.

This was ultimately ignored by the state, though, and Gov. Newsom quickly signed the bill into law.

And it was only back in August when New Jersey did exactly the same, with Phil Murphy signing A5447 and S4852 to make sweepstakes-style casinos illegal up in New Jersey.

More States Following Set to Ban Sweepstakes Casinos

It’s not just California and New Jersey who have recently pushed for and succeeded with sweepstakes bans.

New York is also considering a ban after its Bill S05935A was passed in June earlier this year, while Michigan, Idaho, and Delaware have all sent cease-and-desist orders to the sweepstakes casinos operating within their state borders.

The recent success that states have been having with their anti-sweepstakes casinos bills will, no doubt, encourage others to follow in their footsteps over the coming years, causing further legal headaches for existing operators.

Players Unhappy?

A growing number of states in the US might be anti-sweepstakes casinos, but players certainly aren’t.

Millions of Americans have been hooked on these sites as far back as the COVID-19 pandemic, and a recent survey conducted by the Social Gaming Leadership Alliance found that 77% of players were against having sweepstakes casinos being banned in California.

There’s also been player backlash on social media and Reddit, as many of them are unhappy about the current sweepstakes casino exodus taking place in the states.

One user on Reddit labelled California’s recent ban as “very disappointing” while complaining that “I have made a sizable chunk of money just from playing with free sweepstakes coins that several of these sites gave out often. I will never step foot into a brick and mortar casino where there is no such thing as sweepstakes coins and I'd be paying right out of pocket with every play.”

Seemingly, millions of other players feel the same, too, so it’s safe to say that further sweepstakes bans will not go down well at all, especially if New York is one of the next states to sign a bill into law.

Why Sweepstakes-Style Casinos Are Under Pressure

So, what’s really going on with sweepstakes casinos here?

This new type of casino first exploded around five years ago and sites like Chumba Casino and WOW Vegas have since gone on to receive millions of sign-ups.

It’s a thriving $4bn industry that even mega influencers rapper Drake, who’s paid a reported $100m a year by Stake.us as part of a sponsorship deal, have started getting involved in.

And on the surface, everything seems completely harmless with these sites, but more states than ever want to get rid of them.

The whole concept of an online sweepstakes casino is that you play with virtual ‘Sweeps Coins’ instead of real money and then redeem them for prizes if you collect enough.

In the eyes of many states, including California and Nevada, this is a legal loophole used by operators so that their sweepstakes sites can dodge gambling laws.

This has ultimately led to the ongoing legal mess surrounding sweepstakes casinos, with operators vehemently claiming they’re not gambling sites due to the fact all of the available games are free-to-play and nobody is forced to use Sweeps Coins if they don’t want to.

It's Not the End of the Road for Sweepstakes Casinos

Despite the serious crackdown on sweepstakes casinos throughout the U.S. at the moment, they’re far from over.

These sites have a huge collective player base, as well as massive followings across streaming platforms like Kick and Twitch, where Adin Ross, xQc, and others have helped put them on the map.

With an institution like the sweepstakes casino one, it’s impossible to make them go away completely, as there’s simply too much investment.

The most likely outcome here is that more states will, indeed, continue to outlaw popular sweepstakes casinos like Stake.us, eventually leading to a situation where they’re banned in around 10 or more states.

All of the remaining ones will continue to take part in what is a fast-growing $4bn industry, raking in tons of tax revenue the same way they do from classic online casinos and sportsbooks.

Worry not, sweepstakes fans, because sweepstakes casinos might be banned in some places, but they’re definitely not going away.