You won’t get in legal trouble as a player, but the site might. Colorado can issue fines, injunctions, or even ban access. If a platform looks sketchy or doesn’t explain how to play for free, skip it — it could disappear overnight.
The Centennial State keeps real-money gambling on a tight leash – but Colorado’s sweepstakes casinos are the official workaround. No chips, no wagers, no licenses. Just virtual coins, free entries, and cashable prizes. If you’re in your home state and want to know which sites are live, what you can win, and what’s big in 2025 – this is your page.
Jovan I.
Content Writer
Last updated
29 May 2025
Just because a site calls itself a “sweepstakes casino” doesn’t mean it’s actually legal here. Colorado law is more than clear – if you’re playing games of chance online, the platform must follow specific rules to avoid being treated as illegal gambling.
Before you spend a dime (or even sign up), make sure the site meets all of these legal requirements:
If a site forces you to pay – even in a roundabout way – just to enter or win, that’s not legal here. Colorado law says a real sweepstakes must offer a free way to play.
Whether you buy credits or use a free entry, your chance of winning has to be exactly the same. If paying gives you a better shot, the whole thing tips into illegal territory.
Every sweepstakes needs to lay out the facts: what you can win, how many prizes there are, your odds, the deadlines, and who’s behind the promotion. If you have to dig to find that info (or it’s missing), that’s a red flag.
It all comes down to their structure, which is probably not what you’d expect.
Read our guide for the full story → Why sweepstakes casinos are legal across most of the US
If you’re in Colorado and eyeing a sweepstakes casino, here’s what matters before you hit that “sign up” button:
💡 Heads-up: If you travel out of state or use a VPN, don’t be surprised if your access gets shut down. Where you are matters just as much as how old you are.
If a sweepstakes includes the wrong elements or skips required protections, it’s no longer legal. Here’s what crosses the line:
That’s illegal gambling. You’re risking something of value for a chance to win.
Law: Defined in C.R.S. § 18-10-102(2) – defines gambling as risking anything of value for gain determined by chance.
That’s a simulated gambling device. It doesn’t matter if the game is labeled as a sweepstakes – if it mimics casino play and involves payment for a chance to win something of value, it breaks the law.
Law: Defined in C.R.S. § 18-10.5-103 – bans simulated gambling devices, including electronic or software-based games that award prizes.
That’s considered a sham free entry. If the free method is intentionally inconvenient or hidden, the promotion is not legal
Law: Defined in C.R.S. § 6-1-802 – mandates that “no purchase necessary” must be genuine and clearly offered.
That’s functionally a casino payout. Giving real-world value (cash, gift cards) through games of chance with payment involved crosses into illegal gambling.
Law: Defined in C.R.S. § 6-1-803(1)–(5) – mandates visible prize details, odds, deadlines, and sponsor info.
Just because a sweepstakes casino game says it’s “free to play” doesn’t make it legal. Colorado law focuses on what the game actually does, not how it’s advertised.
If you have to make a purchase to unlock gameplay, credits, or entries – even indirectly – it still counts as payment under the law. And if the game involves chance and offers a prize, it becomes illegal gambling, no matter the label.
When you win something from a sweepstakes casino in Colorado, the prize has to follow the rules under the Colorado Consumer Protection Act (C.R.S. § 6-1-101 et seq.). That law puts a few guardrails in place — and they affect both what you can win and how it’s presented.
Here’s what you can expect:
✅ Cash, coins, and merchandise – sites can offer real cash, redeemable Sweeps Coins, gift cards, or items like tech gear or branded prizes – as long as they give you a way to enter without paying.
❌ No tobacco, booze, or firearms – Colorado consumer law bans these from any sweepstakes prize pool, full stop. If you see a promo offering them, that site’s not playing by the rules.
📝 Clear descriptions – Every prize needs to be explained in plain language: how much it’s worth, how many are up for grabs, and when/how it’ll be delivered. If it sounds vague or too good to be true, that’s a red flag.
If you win real-world prizes playing sweepstakes casinos in Colorado, you owe taxes – it doesn’t matter if the site is licensed, based out of state, or never sends you a form.
You must report anything you win that has real value:
Colorado uses your federal adjusted gross income (AGI) to calculate state taxes – so if it’s taxable to the IRS, it’s taxable here too.
Sources:
If you win $600 or more from one site and the prize is worth 300 times your entry amount, the site should send you a 1099-MISC. Then again, many sweepstakes operators skip this, especially the offshore ones. But you still have to report those winnings on your taxes.
Sources:
You must include your sweepstakes income on Colorado Form DR 0104. The state taxes it the same way it taxes your paycheck or freelance income.
In 2025, you pay a flat 4.4% state income tax on it.
Sources:
Don’t wait for the operator to handle your taxes. If you win and cash out, it’s on you to track it and file it. The IRS and Colorado DOR can hit you with penalties if you don’t.
Sources:
Compare Colorado with its closest neighbor states
Yes, you are. Colorado doesn’t license sweepstakes casinos, but it doesn’t ban them either – as long as they offer free entry and don’t cross into traditional gambling territory. If a site sticks to the promo-based model (like giving you Sweeps Coins for free), you’re good to go.
You won’t get in legal trouble as a player, but the site might. Colorado can issue fines, injunctions, or even ban access. If a platform looks sketchy or doesn’t explain how to play for free, skip it — it could disappear overnight.
Many operators have geofenced Colorado after enforcement actions citing the Colorado Consumer Protection Act. If you can’t access a site or register with a CO address, it’s likely the platform pulled out to avoid penalties.
Yes, as long as the site gives you a legitimate free-entry method, you can legally redeem Sweeps Coins or prize equivalents like cash or gift cards. Just know: sites that don’t follow these rules may block CO users or get shut down.
Yes. If you win real cash or prizes from a sweepstakes casino, Colorado treats it as income. You’ll need to report it when filing your state taxes, even if the site doesn’t send you a form. Colorado’s flat income tax rate currently sits at 4.4% (as of 2025).
