Sweepstakes Casinos Face Legal Challenges as States Crack Down on Gambling Like Operations
In 2025, sweepstakes casinos—online platforms that offer casino-style games using virtual currencies—are under increasing legal scrutiny across the United States. States like North Carolina are leading efforts to regulate or ban these operations, citing their resemblance to real-money gambling.
North Carolina’s Legal Stance
North Carolina has been at the forefront of this movement. In a significant decision, the North Carolina Court of Appeals ruled against No Limit Games, a company operating video sweepstakes kiosks in Robeson County. The court determined that the games were predominantly based on chance rather than skill, thus violating state gambling laws. This ruling overturned a previous decision that had allowed the company to continue operations.
This decision is part of a broader effort by North Carolina lawmakers to close loopholes that have allowed sweepstakes operations to flourish. Despite modifications by operators to emphasize skill elements, courts have consistently found that these games rely heavily on chance, keeping them outside legal boundaries.
Nationwide Legislative Actions
North Carolina is not alone in this crackdown. At least seven states have active legislation targeting online sweepstakes operators, aiming to prohibit unregulated gambling-like activities. For instance, Maryland’s Senate unanimously approved a bill to ban sweepstakes casinos, defining them as platforms that mimic online casino-style gaming through a dual-currency system.
Similarly, Mississippi’s Senate voted to ban certain online gaming platforms, including sweepstakes casinos, imposing stiff penalties for operators and promoters. New York is also considering legislation to ban online sweepstakes gaming, with a Senate committee voting unanimously in favor of the ban.
Industry Response
In response to these legal challenges, several sweepstakes casinos have begun withdrawing from states with stringent regulations. High 5 Casino and Stake.us, for example, have updated their terms of service to restrict access in states like Connecticut, Delaware, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Players in these states have been given deadlines to redeem any eligible virtual currencies before losing access to the sites.
This trend reflects a growing caution among operators as they navigate the complex and evolving legal landscape surrounding sweepstakes casinos.
Looking Ahead
The increasing legal scrutiny of sweepstakes casinos signals a shift in how these platforms are perceived and regulated. As more states take action against operations that closely resemble real-money gambling, the industry may need to adapt by enhancing transparency, emphasizing skill-based elements, or seeking proper licensing.
For players, these developments underscore the importance of understanding the legal status of sweepstakes casinos in their respective states. As the regulatory environment continues to evolve, staying informed will be crucial for both operators and users in navigating the future of online gaming.