Key Moments:
- Oklahoma has introduced SB 1589, which would criminalize sweepstakes-style online casino games and hold service providers liable.
- Utah has expanded both regulatory and consumer protection measures to address sweepstakes casinos without imposing a full ban.
- Six states have taken action to ban sweepstakes casinos in 2025, while additional states prepare new regulations for 2026.
Legislative Actions Target Sweepstakes Casino Operations
Sweepstakes casinos saw increased popularity during the pandemic, operating in a legal gray area. Now, Oklahoma and Utah have introduced new laws intended to bring more clarity and tighter oversight to these platforms. Oklahoma has enacted a direct criminal prohibition, while Utah has opted to strengthen regulatory and consumer protection authorities.
Lawmakers cite concerns related to consumer safety, responsible gaming, and ambiguities around winnings and withdrawals. They contend that sweepstakes casinos imitate unlicensed gambling, prompting new legislative efforts to close longstanding regulatory gaps.
Oklahoma’s Senate Bill 1589: Expanding Criminal Liability
Senate Bill 1589 in Oklahoma revises existing gambling statutes to make sweepstakes-style online casino games unlawful. The bill defines illegal gambling as any internet or mobile game simulating casino gambling in which something of value is at stake. This includes virtual coins used in dual-currency models if they can be redeemed for prizes or money.
Importantly, SB 1589 extends criminal responsibility to media outlets, affiliates, and geolocation service providers involved with sweepstakes casinos. The legislation aims to curtail the ecosystem enabling these platforms by holding a broader range of service providers accountable. These steps could limit industry expansion and deter reputable stakeholders from engaging with such operations.
Violations under SB 1589 would constitute Class C2 felonies, carrying potential fines of $500 to $2,000 and possibilities of imprisonment. Should lawmakers approve the bill during the 2026 session, the rules are scheduled to take effect on November 1, 2026.
Utah Adopts a Dual-Path Enforcement Model
Utah’s legislative response blends criminal and civil enforcement, creating flexibility for tackling sweepstakes casinos. Rather than banning them outright, Utah leverages gambling laws alongside consumer protection rules to address specific issues or expedite actions as needed.
House Bill 243 expands the legal definition of “fringe gambling” to include sweepstakes casinos and eliminates exemptions that previously shielded such platforms. The bill narrows which devices and promotions qualify as amusement, specifying that any system presenting sweepstakes or cash-like rewards constitutes gambling, not entertainment.
Strengthened Consumer Safeguards in Utah
Senate Bill 38 provides Utah’s Division of Consumer Protection with heightened authority over prize contests and digital incentives. The agency can pursue civil actions even without criminal charges, focusing on imposing financial and reputational penalties. This law also allows officials to publicly identify non-compliant operators.
Under HB 243, prizes must be limited to modest, non-cash items such as toys or novelties, while rewards like cash, gift cards, or store credit are excluded. Casino-style games, including bingo, poker, and slots, are strictly forbidden. The legislation further outlaws systems involving dual currencies, delayed prizes, discounted rewards, or gambling-like gameplay.
Broader National Moves Against Sweepstakes Casinos
During 2025, authorities in six states banned sweepstakes casinos, marking a shift in regulatory approach. States including Indiana, Florida, Maine, Mississippi, Virginia, Iowa, Oklahoma, and Utah are planning or advancing additional measures in 2026. Regulatory agencies increasingly discount the argument that sweepstakes casinos are merely promotional tools, classifying them under the banner of unlicensed gambling.
The regulatory environment is becoming more stringent, with legislators closing loopholes and ambiguous regulatory frameworks in favor of cohesive policies treating online gambling as a legitimate, regulated sector. This indicates a trend toward prioritizing licensed and regulated online gaming platforms in the United States.
| State | Legislative Action | Effective Date (if specified) |
|---|---|---|
| Oklahoma | SB 1589 – Criminalizes sweepstakes-style online casinos, extended liability to service providers | November 1, 2026 (pending approval in 2026 session) |
| Utah | HB 243 & SB 38 – Expands consumer protection and civil/criminal enforcement against sweepstakes casinos | Not specified |
| Six states | Banned sweepstakes casinos | 2025 |
| Several states including Indiana, Florida, Maine, Mississippi, Virginia, Iowa, Oklahoma, Utah | Preparing new legislation | 2026 |
- Author
Daniel Williams
