If you’ve come across sites offering real cash prizes for games like slots and blackjack – without officially calling themselves online casinos – you’re probably thinking: How is this not gambling? Fair question – particularly when you consider that online gambling faces significantly stricter regulations, despite seeming so similar to sweeps sites. So, if you’re scratching your little head, puzzled about how it actually works, this page will break it down for you and explain why sweepstakes casinos are legal in the majority of states.
Jerard V.
Content Manager
Last updated
27 May 2025
In order to understand why sweepstakes casinos have a different legal status than online gambling, we need to start with the basics.
This begins with the definition: Under U.S. law – and more specifically, as used by courts, regulators, and most state statutes – something is generally considered gambling if it checks three boxes:
And here we already have the first major difference: the sweepstakes model elegantly sidesteps the third box – you are under no obligation to pay to play. It’s exactly that one little change that prevents lottery operators from falling under the legal framework of gambling
Only seven US states have fully legalized online casino gambling as of 2025: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia, and Nevada.
Source:
🔗 World Population Review – Online Gambling Legal States 2025
Sweepstakes casinos are legal in most U.S. states simply because there aren’t any specific laws against them yet. Until regulations are put in place, they stay legal by default.
That single distinction changes more than just the legal label because it essentially reshapes how everything else works. Here’s how they compare side by side between online gambling and the legal sweeps model (frequently also called the ‘lottery’ model):
| Feature | Online Gambling | Sweepstakes Casinos |
| Legal Framework | Governed by state-regulated gambling laws; may involve federal laws like the Wire Act and UIGEA | Governed by sweepstakes, consumer protection, and promotional laws (FTC, USPS, and state-specific) |
| Currency System | Uses real money directly for deposits, bets, and withdrawals | Uses two virtual currencies—one paid (e.g., Gold Coins), one free (e.g., Sweeps Coins) with prize potential |
| Purchase Requirement | Payment is required to play or place bets | No purchase necessary; must offer free entry methods (e.g., mail-in, daily bonus) to stay compliant |
| Prize Redemption | Players win cash or credits directly | Only Sweeps Coins can be redeemed for cash or prizes; Gold Coins are just for entertainment |
| Game Types Offered | Slots, poker, blackjack, sports betting, and more | Similar games, but framed as promotional gameplay tied to sweepstakes entries |
| User Eligibility | Typically 21+ with ID verification and geolocation | Usually 18+, with account verification but not tied to real-money gambling age requirements |
| Regulatory Oversight | Licensed by state gaming commissions with audits and security requirements | Overseen by federal consumer and postal laws; no gambling licenses, but still legally constrained |
| State Restrictions | Only allowed in states that have legalized online gambling | Generally legal in more states, but some have banned sweepstakes casino models entirely |
| Revenue Model | Profits from player losses and house edge | Profits from selling Gold Coin packages; Sweeps Coins are a free promotional bonus |
| Risk Classification | Classified as gambling under U.S. law | Not legally gambling if run according to sweepstakes rules (e.g., free entry, prize limits) |
So, legally speaking, sweepstakes casinos aren’t the same as online gambling because:
So, what’s the deal with not having to pay to play? Well, it all comes down to how the operators set up the currency system. Essentially, it’s based on a two-coin system: You pay for one type but not the other.
Gold Coins = Play-for-Fun CoinsYou’ve got Gold Coins on one side, which are the ones you actually pay for. They may have different names, but that is definitely the one we have come across most often. These coins are what you buy, play games with, and that’s basically where it ends. They’re not worth anything outside of that. You can’t turn them into money, and you can’t trade them for prizes. They’re there so you can play.
Sweep Coins = Redeemable CoinsThen there are Sweeps Coins (which may have different names, but this is the most common), and this is where the rules change. Simply put, you don’t pay for these. And that’s the whole point. Instead, they’re handed out in ways that are deliberately limited—like as a bonus when you buy Gold Coins, as part of a daily login, or maybe in a promo email or something they post on social media. And yes, there’s still a mail-in method. It’s tedious, but technically it works.
Even though online sweepstakes casinos don’t count as traditional gambling, they still have to follow a set of federal rules that apply across the entire country. These nationwide laws are what keep things fair, transparent, and player-friendly.
Let’s take a look at the key ones that shape how these platforms operate – no matter where you’re playing from.
These laws make it illegal to run or promote a lottery across state lines, including by mail or broadcast.
A “lottery” here means any game that includes:
👉 Why it matters:
Sweepstakes operators stay legal by removing the “pay-to-play” element. That’s why they must offer free ways to enter, like mail-ins or daily bonuses.
🏛️ Statues:
These specific regulations of the Deceptive Mail Prevention and Enforcement Act control how sweepstakes can be marketed through the mail. It bans misleading claims like “You’re a winner!” if you’re not, and makes it illegal to suggest buying something improves your odds.
👉 Why it matters:
If sweepstakes are promoted by mail, they must:
🏛️ Statue:
This law gives the FTC the power to stop any unfair or misleading business practices, including sweepstakes bonuses and promotions.
👉 Why it matters:
All legal sweepstakes operators must be truthful and transparent. That includes:
Fake claims or shady promotions? Well, that can get shut down pretty fast.
🏛️ Statue:
This comes into play when sweeps operators are pushed over the phone, and it makes sure there’s no glossing over the fine print – especially when prizes are on the table
👉 Why it matters:
If you run or promote sweepstakes by phone, you must:
🏛️ Statue:
Applies to email marketing of sweepstakes.
👉 Why it matters:
Sweepstakes emails must:
🏛️ Statues:
These are rulings from courts and guidance from regulators like the FTC, USPS, and state attorneys general.
👉 Why it matters:
They’re the ones who shaped the standard definition of illegal gambling: Prize + Chance + Consideration.
Sweepstakes operators rely on these interpretations to stay within legal line, especially by dropping the “consideration” (payment) piece.
While federal laws lay down the general ground rules, it’s really at the state level where things start to vary, and sometimes get a little messy. That’s because every state has its own way of defining what counts as gambling and what qualifies as a legal sweepstakes casino.
Some have passed specific laws aimed at online sweeps operators, while others haven’t touched the topic at all, leaving things in that familiar legal gray zone.
That said, even when states make their own rules, they still have to operate within the boundaries set by federal law – so the basic requirements – like offering a free way to play, still apply no matter where you are.
We sifted through legal codes, statutes, and enforcement actions to highlight how different states approach sweepstakes operators, with real examples and law references where they exist.
It’s not a full legal breakdown, but it gives you a solid snapshot of how uneven the landscape in reality is. Spoiler: it’s anything but one-size-fits-all.
🧾 Key Ruling: People ex rel. Green v. Grewal, 61 Cal.4th 544 (2015)
⚖️ The California Supreme Court ruled that sweepstakes software acting like a slot machine is illegal. However, standard promotional sweepstakes remain legal if not linked to slot-like game systems.
🧾 Statute: Florida Statutes §849.094 (Game Promotions)
⚖️ Sweepstakes are allowed if they are “incidental to the sale of a bona fide product” and properly registered. The state cracked down on cafés simulating slot games via Chapter 2013-2, treating those systems as illegal gambling devices.
🧾 Statute: General Business Law §369-e
⚖️ Sweepstakes with prizes over $5,000 must be registered and bonded with the Secretary of State. No outright ban on legal online sweepstakes casinos if they follow contest and consumer laws.
🧾 General Consumer Protection Law, 73 P.S. § 201-1
⚖️ Sweepstakes are legal when they follow traditional no-purchase-necessary rules. No statute or regulatory body has issued a ban on online sweepstakes casino models.
🧾 Statute: C.R.S. § 18-10-102 (definitions of gambling)
⚖️ Sweepstakes that do not require payment and offer free entry avoid being classified as gambling. Online sweepstakes operators are tolerated under general promotional contest rules.
🧾 Statute: O.C.G.A. § 10-1-393(b)(16)
⚖️ Allows promotional contests with no payment required. Does not permit prize-linked electronic devices, but online sweepstakes with clear AMOE (Alternate Means of Entry) are not specifically banned.
⚖️ Gambling is defined strictly. Promotional sweepstakes are legal when no consideration is required. No law bans online sweepstakes casinos that follow standard promotional structure.
Below, you will find a complete list of U.S. states in which playing at legal sweepstakes casinos is generally tolerated.
| Alabama | Alaska | Arizona | Arkansas |
| California | Colorado | Connecticut | Delaware |
| Florida | Georgia | Hawaii | Illinois |
| Indiana | Iowa | Kansas | Kentucky |
| Louisiana | Maine | Maryland | Massachusetts |
| Minnesota | Mississippi | Missouri | Nebraska |
| Nevada | New Hampshire | New Jersey | New Mexico |
| New York | North Carolina | North Dakota | Ohio |
| Oklahoma | Oregon | Pennsylvania | Rhode Island |
| South Carolina | South Dakota | Texas | Tennessee |
That said, a few states have already opted out completely. And that would be the following four:
And indeed, more states could follow. Regulation is getting tougher, with lawmakers in several states starting to propose new bills that target legal sweepstakes casinos.
So, are U.S. sweepstakes casinos completely legal? In most states – yes, they are. But as you’ve seen, it’s not as simple as a blanket “yes” or “no.” These platforms exist in a carefully crafted legal space, one that hinges on not charging you to play and clearly separating fun play (Gold Coins) from redeemable prizes (Sweeps Coins).
Operators have to work within both federal rules and state-by-state definitions – and in some places, lawmakers are starting to pay much closer attention.
For players, that means one thing: Before hopping from one site to the next, it’s worth knowing how your state sees things. Because while most states are still sweepstakes-friendly, a handful have already slammed the door, and others may not be far behind.
As always, we’ll keep you posted. Play smart, know the rules, and enjoy the sweeps games – legally.
Yes – in most states, they’re perfectly legal. As long as they follow the key rule – offering a free way to play – they don’t fall under traditional gambling laws. A few states (Washington, Montana, Idaho, and Michigan) have banned them outright, but in most places, they’re allowed.
Because they leave out the one thing that turns a game into gambling: payment. You can’t buy Sweeps Coins – the redeemable ones – directly. They’re only given out for free through promos, bonuses, or mail-ins. You can pay for Gold Coins to play for fun, but anything tied to real prizes must be optional and free. That’s what keeps it within legal limits.
Nope – and that’s the whole point. Because they’re not classified as gambling (thanks to the free-to-play model), legal sweepstakes casinos don’t need a traditional gambling license. Instead, they follow sweepstakes and promotional laws, which don’t require the same type of state-level gaming approval.
Because it’s what makes the whole thing work. U.S. law says you can’t require payment to enter a prize-based game of chance. By offering a no-purchase mail-in entry, sweepstakes operators prove that playing is truly optional – which keeps them out of gambling territory, legally speaking.
