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Sweepstakes Casinos Hit Wall of State Bans as Four Bills Land on Governors' Desks

Louisiana goes furthest with racketeering classification; Tennessee, Iowa, and Indiana close behind as Chumba, Stake.us, McLuck, and Ruby Sweeps exit multiple states.

Category: iGaming News - USA · By Growl Games Editorial Team · Tue May 12 2026 · Updated Thu Jul 23 2026

Sweepstakes Casinos Hit Wall of State Bans as Four Bills Land on Governors' Desks

Table of Contents

Summary

Four U.S. state legislatures pushed sweepstakes casino bans onto governors' desks during the past week, capping the most concentrated multi-state crackdown the dual-currency gaming model has faced since California, New York, and New Jersey enacted bans last year. Louisiana, Tennessee, and Iowa have all sent bills to their respective governors, and Indiana's HB 1052 cleared the House 87–11 and is moving through the Senate. Operator exits are now coming in real time: Ruby Sweeps left Indiana on May 4 ahead of an effective date, and WOW Vegas ended Sweeps Coin play in Illinois on May 1. The wave continues a 2026 trend in which state lawmakers, state AGs, and gaming regulators have moved in tandem against the Gold Coin / Sweeps Coin structure that defines the sector.

Louisiana: Racketeering Treatment

Louisiana HB 53 is the most aggressive bill in the current wave. It passed the Louisiana House 86–11 and the Senate 27–9 before being enrolled and sent to Governor Jeff Landry. The bill bans sweepstakes casinos and classifies them under Louisiana's racketeering statute, meaning operation of a dual-currency platform could be treated as organized criminal conduct. Penalties reach up to 50 years' imprisonment and fines of up to $1 million per violation. Governor Landry vetoed an earlier direct ban bill, arguing the format was already illegal under existing law; the Louisiana Gaming Control Board subsequently issued roughly 40 cease-and-desist letters and sued VGW and WOW Vegas for $44 million in back taxes in September 2025. Landry has 10 days to act on HB 53; inaction allows it to become law automatically.

Tennessee: Codification After Enforcement

Tennessee SB 2136 passed the Senate 32–0 in March and cleared a House subcommittee 8–0; the bill and its companion HB 1885 moved through a conference committee agreement on April 23 and now sit on Governor Bill Lee's desk. The legislation targets dual-currency sweepstakes games specifically and takes effect immediately on signature or by inaction. Tennessee enforcement is already well advanced: Attorney General Jonathan Skrmetti issued cease-and-desist orders to roughly 40 operators on December 29, 2025, and major brands including Chumba Casino, McLuck, Stake.us, and Crown Coins exited the Tennessee market before any bill was signed. Codification will lock in what AG enforcement has already imposed.

Iowa: Bigger Regulator Toolbox

Iowa Senate File 2289 passed both chambers unanimously and was sent to Governor Kim Reynolds. Rather than relying on criminal penalties, Iowa's approach grants the Iowa Racing and Gaming Commission direct enforcement authority over sweepstakes operators and unlicensed gambling more broadly — including the ability to issue cease-and-desist orders and seek court injunctions against offshore sportsbooks. Industry observers expect the Iowa model to be widely copied, since it equips state regulators rather than depending on legislative line-drawing around dual-currency mechanics.

Indiana and the Broader Map

Indiana HB 1052 passed the House 87–11 and is now in the Senate. It imposes civil penalties of up to $100,000 per violation on dual-currency platforms. Indiana Gaming Commission Chairman Nate Friend told the House Public Policy Committee earlier this session that nine states are working on 2025–2026 sweepstakes legislation: Indiana, Maine, Arkansas, Maryland, Mississippi, Florida, Illinois, Ohio, and Massachusetts. Maine LD 2007 was signed by Governor Janet Mills on April 6 and takes effect around July 14, treating Sweeps Coins as indirect consideration under Maine gambling law. Minnesota SF 4474 is advancing to the Senate floor. The District of Columbia's CB 260656 would simultaneously legalize real-money iGaming and ban sweepstakes operators. Maryland HB 1226 and HB 295 stalled in the Senate, one of the few legislative failures in the current cycle. Mississippi SB 2104 cleared committee but stalled in the House Gaming Committee for the second year running. Existing bans in California (AB 831, effective January 1), New Jersey (AB 5447), New York (S 5935A), Connecticut (Public Act 25-112), Montana (SB 555), Nevada (SB 256), Michigan, Idaho, Washington, and Delaware remain in force.

Operator Exits

Operator behaviour is now a leading indicator. Ruby Sweeps exited Indiana on May 4, ahead of the July 1 effective date of HB 1052. WOW Vegas ended Sweeps Coin gameplay for Illinois residents as of May 1, following the Illinois Attorney General's cease-and-desist sweep against more than 60 operators. Smiles Casino became the first known operator to exit Illinois entirely after receiving a C&D. Kickr, a sweepstakes sportsbook, announced it will cease operations on March 31. VGW founder and CEO Laurence Escalante is on leave of absence amid criminal charges in Australia. Many operators, including Chumba, McLuck, Stake.us, Crown Coins, High 5, and RealPrize, have moved to comply pre-emptively as new bans pass.

What It Means

For the sweepstakes sector, the structural question raised by Louisiana's racketeering classification is whether the dual-currency model can survive at all as a U.S.-facing product. Approximately 35 states still permit the model — including large markets such as Texas, Florida, Ohio, Pennsylvania, Arizona, Michigan-adjacent states, Georgia, North Carolina, and Virginia — but the policy direction is one-way and accelerating. The pattern across 2025 and 2026 has been that statutory bans and AG-led enforcement reinforce each other: AG cease-and-desist actions force operator exits before bills are signed, and bills then codify what enforcement has already imposed. For state-licensed iGaming operators, the wave is competitively favourable, removing a category of unlicensed competition. For the prediction-market sector, Connecticut Governor Lamont's Bill 5038 — restricting under-21 betting on prediction markets and capping advertising — signals that the same regulatory logic is beginning to extend toward Kalshi- and Polymarket-style platforms. For offshore real-money operators serving U.S. users, the Iowa model is the more important signal: state gambling regulators are being equipped with direct civil enforcement authority over unlicensed online operators, with offshore sportsbooks explicitly named.

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