Connecticut is on the verge of banning online sweepstakes casinos, with Senate Bill 1235 receiving unanimous support from both legislative chambers. The bill was approved by the House of Representatives on Tuesday with a 146–0 vote, having previously passed the Senate with a 36–0 vote.
The bill is now pending the signature of Governor Ned Lamont, who can either sign it into law immediately or allow it to take effect automatically after 15 days if he does not sign or veto it. If enacted, the prohibition will take effect on October 1.
The bill specifically targets any sweepstakes or promotional drawings that utilize simulated gambling devices or enable real or simulated online casino gaming or sports wagering. Operating such platforms will be classified as a Class D felony, carrying a potential penalty of up to five years in prison and a $5,000 fine.
This legislation is part of a larger reform of Connecticut’s gambling regulations, introducing stricter regulations for lottery couriers and new transparency mandates for operators. Although the main focus is on reducing unregulated gambling, there is an exception for sweepstakes linked to grocery retail chains.
Promotions are permitted if the prizes are non-cash and solely consist of discounts on grocery purchases at retailers with five or more locations. This legislative move aligns with a rising trend across various U.S. states aimed at curbing unregulated sweepstakes casinos.
Connecticut follows Montana in implementing a ban, while similar legislation is making progress in states such as Louisiana, New York, and New Jersey. These online casinos, which operate in ambiguous legal territories, allegedly amassed over $67 billion in revenue in 2023. Several major sweepstakes platforms, including VGW and Stake, have already exited Connecticut in anticipation of the regulatory changes.
The Connecticut Department of Consumer Protection (DCP) supports the bill. DCP Commissioner Bryan Cafferelli stated that the legislation would “enhance our regulatory oversight within the gaming sector.”
Connecticut’s regulated online casino market, currently restricted to platforms run by the Mohegan Tribe and the Mashantucket Pequot Tribal Nation, in collaboration with FanDuel and DraftKings, has witnessed increased tax revenues since legalization in 2021.
Online casino revenue amounted to $275 million for the fiscal year 2023–2024, generating nearly $50 million in tax revenue at the existing 18% tax rate. This tax rate is set to rise to 20% in 2026. Since the legalization of online casinos, Connecticut has collected a total of $123.2 million in taxes from this sector.
Alongside the prohibition of sweepstakes casinos, SB 1235 also prohibits third-party lottery couriers operating within Connecticut. Similar measures have already been enacted in Florida and California, with Texas also moving toward a ban amid controversies concerning unauthorized lottery services.
The bill incorporates various administrative and compliance reforms intended to tighten control over the state’s gambling framework. These reforms include confidentiality requirements for criminal background checks, stricter record-keeping standards, and new advertising restrictions for gaming operators.