Montana Takes a Stand: First US State to Ban Sweepstakes Casinos

What the Law Entails: A Broad Internet Gambling Ban

SB 555 doesn’t explicitly mention sweepstakes casinos but prohibits all internet gambling involving “any form of currency.” This sweeping definition covers online casinos and any platform that allows bets or wagers using currency, alongside payouts in any currency form.

This distinction is crucial for sweepstakes and social casinos, which typically operate using a dual currency system. Players use a “fun” currency for gameplay, while a premium currency - obtained through promotions or bundled with purchases - can be redeemed for cash prizes. Importantly, direct purchases of this premium currency are not allowed.

Violations of the law are treated seriously, classified as felonies punishable by fines up to $50,000 and/or prison terms reaching 10 years. The bill does carve out allowances for internet gambling without currency exchange, however.

Industry Response: SPGA Voices Strong Opposition

The Social and Promotional Games Association (SPGA), representing sweepstakes casino operators, immediately condemned Montana’s ban. The SPGA criticises the legislation as vague and overly broad, potentially criminalising legitimate digital promotions such as Microsoft Rewards.

In a press statement, the SPGA warned that the law sets a “dangerous precedent” that could erode consumer trust, stifle business innovation, and undermine established legal marketing practices. The organisation pointed out that similar measures have been rejected in states like Arkansas and Florida, urging lawmakers nationwide to favour clear, targeted regulations over broad prohibitions.

The Wider US Landscape: 12 States Eye Sweepstakes Casino Regulation

Montana’s ban is part of a growing wave of legislative activity, with 12 states having introduced bills aimed at sweepstakes casinos. These include:

• Arkansas
• Connecticut
• Florida
• Illinois
• Louisiana
• Maryland
• Mississippi
• Montana
• Nevada
• New Jersey
• New York
• Ohio

Several states have seen legislative efforts falter. Mississippi’s Senate passed a ban, but disputes with the House over sports betting caused the bill to fail. Maryland’s Senate also approved a ban, yet it stalled in the House. Florida and Arkansas witnessed similar failures.

Yet momentum builds elsewhere. Ohio recently proposed a ban, while Connecticut and Louisiana are moving swiftly with bills passed in the Senate and pending further votes. New York’s companion bills have cleared initial committees and await the next steps.

Montana Sets the Pace Amidst Growing Scrutiny

Montana’s pioneering ban on sweepstakes casinos signals a tightening regulatory environment across the US. While the industry pushes back against sweeping restrictions, lawmakers in multiple states are weighing similar moves. The coming months will be critical as these bills progress, potentially reshaping the social casino market and its promotional landscape.