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Published on: April 21, 2026, 11:58 AM.
Updated on: April 21, 2026, 12:00 PM.
- Prediction markets continue to dominate discussions within the US gaming sector
- This may provide an advantage to sweepstakes casinos by evading legislative prohibition
Previously, prior to the launch of prediction markets that facilitated trades on sports outcomes, online sweepstakes casinos faced significant scrutiny from the regulated gaming sector. Now, the focus has shifted to prediction markets, benefiting the sweepstakes industry.
Sweepstakes casinos present themselves as social gaming platforms, allowing users to enjoy online slots and interactive table games recreationally. They feature a secondary digital currency referred to as sweeps coins, supposedly allowing users to enter sweepstakes games where winnings can be converted into cash.
Currently, online gambling involving slots and table games is permitted only in eight states: Connecticut, Delaware, Maine, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. States without online gaming have argued in legal documents that sweepstakes casinos breach state gaming regulations with their dual-currency sweepstakes system.
In defense, sweepstakes casinos assert that they conduct promotional games, akin to retail sweepstakes examples like McDonald’s Monopoly.
Staying Under the Radar
As state attorneys general, gaming regulators, and lawmakers concentrate on prediction markets, sweepstakes casinos have been able to avoid scrutiny. Consequently, efforts to impose state bans on these games have largely failed.
In March, a proposal in Massachusetts to outlaw all online sweepstakes was unable to gather enough momentum. The Massachusetts Joint Economic Development and Emerging Technologies Committee opted to advance House Bill 4431 for further analysis instead.
Recently, the Maryland General Assembly concluded without enacting a ban on sweepstakes casinos.
House Bill 295 in Maryland sought to implement penalties of up to $100,000 and three years’ imprisonment for operating an online sweepstakes casino, having passed the Maryland House of Delegates earlier in March with a vote of 105-24 but stalling in the Senate Committee on Budget and Taxation. The Maryland General Assembly wrapped up its 2026 session on April 13.
Maryland serves as a focal point in the ongoing legal battles concerning prediction markets, as evidenced by the federal lawsuit initiated by the Maryland Lottery and Gaming Control Agency against Kalshi in the state’s US District Court. The case has since progressed to the US Court of Appeals for the Fourth Circuit.
Some thirty-eight states have expressed support for Maryland, contending that the Commodity Exchange Act, which federally regulates prediction markets, does not override state gaming laws.
Attempts to impose sweepstakes casino bans in Utah, Mississippi, and Virginia have also faltered in 2026. Similar efforts in Tennessee, Oklahoma, and Maine appear unlikely to succeed in the final weeks of their legislative sessions.
Indiana and Minnesota’s Legislative Actions
Indiana is one state that successfully banned sweepstakes casinos in 2026, with House Bill 1052 modifying the state’s gaming laws to define and impose civil penalties for operating sweepstakes games.
Minnesota is on track to possibly follow suit, with its legislative session running through May 18. Senate File 4474 proposes making online sweepstakes illegal, although it has yet to be put to a vote on the floor.
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