The first legislative chamber in Indiana has acted to ban sweepstakes casinos, with house representatives sending House Bill 1052 to the state senate.
Authored by Rep. Ethan Manning, the bill passed the House 87-11 on February 2, 2026, and is now set for further scrutiny in the upper chamber. Entities found in contravention of the bill could face civil penalties up to $100,000.
Language added to bill to strengthen anti-sweepstakes casino sentiment
The bill has been co-sponsored by senator Ron Alting on its journey through to the upper chamber, where it is expected to comfortably pass.
Online games that once sidestepped Indiana gambling laws by using dual‑ or multi‑currency systems would no longer be exempt under the revised proposal.
Lawmakers strengthened the bill by adding explicit references to “multi‑currency” platforms, closing a loophole that previously allowed some gambling‑style games to operate legally. Under the updated language, any platform that uses more than one type of in‑game currency would fall under the state’s ban.
Senators will now decide whether to advance a full ban on sweepstakes casinos or explore alternative frameworks raised during earlier committee discussions. For now, the proposal stands as the most advanced sweepstakes‑focused legislation expected to be considered anywhere in the country in 2026.
Other states to follow suit
State lawmakers and regulators spent 2025 cracking down on unregulated sweepstakes casinos, even as national attention shifted toward prediction markets.
Several states passed bans targeting dual‑currency sweepstakes platforms that mimic online casinos by using “gold coins” for play and “sweeps coins” redeemable for real‑money prizes. Regulators across the country issued more than 100 cease‑and‑desist orders, arguing the sites exploit loopholes in long‑standing sweepstakes laws.
Major states including New York and California enacted prohibitions, joining Connecticut, Montana and New Jersey. Louisiana’s governor vetoed a similar bill but regulators there still moved against operators.
Analysts estimate sweepstakes casinos generated $10 billion in 2024, with California representing roughly 20% of the market and New York accounting for more than $760 million. As enforcement intensified, major operator VGW withdrew from Canada to focus on the U.S. market.
Opponents of sweepstake ban urge for regulation
Despite mounting pressure, sweepstakes operators are urging lawmakers to regulate rather than ban the industry, arguing that modernized rules could generate tax revenue and distinguish sweepstakes from gambling.
Jeff Duncan, a former South Carolina congressman and executive director of the Social Gaming Leadership Alliance (SGLA), said at an National Council of Legislators from Gaming States (NCLGS) meeting last year: “We want to be regulated. We want to pay taxes. It’s never dollar-for-dollar, you’re never wagering your money.
“In a regulated, taxed environment, there is an opportunity to help the budget of the states that are struggling. If you kick them to the curb, you miss out on the opportunity on tax revenue for the state and creating a regulated environment we advocate for.”
But many legislators and regulators remain unconvinced, citing the redeemability of virtual currency as the defining issue. Heading into 2026, states including Florida, Indiana and Maine have already introduced new bills to outlaw the platforms, signaling that the push against grey‑market operators is far from over.
Sweepstakes casinos contribute less in tax than regulated online casinos
Sweepstakes casinos operate in a legal gray area and do not pay state gaming taxes, because they claim to be promotional sweepstakes rather than gambling.
By classifying themselves as promotional sweepstakes, they bypass the licensing requirements, tax rates and regulatory fees that apply to legal online casinos. Regulated operators, meanwhile, must secure state licenses, pay gaming taxes that can range from 15% to more than 50%, and contribute to responsible‑gaming programs.
This gap has prompted growing concern among lawmakers and analysts. Industry reports describe sweepstakes casinos as exploiting legal loopholes and “denying states millions in tax revenue,” underscoring how their untaxed business model contrasts sharply with the substantial, trackable revenue generated by regulated online casinos in states like New Jersey, Pennsylvania and Michigan.
