A sweepstakes or social casino is typically an online platform where users can play games resembling those found on gambling sites without needing to wager real money.

The decision also emphasizes a growing national trend toward stricter regulation of sweepstakes and promotional gaming platforms.

Connecticut’s New Law: Public Act 25-112

Connecticut Governor Ned Lamont signed Senate Bill 1235 into law, now known as Public Act 25-112. This law makes it illegal to operate or promote online sweepstakes casinos within the state.

Key Points of Public Act 25-112

• Comprehensive Ban: The act bans individuals and companies from offering or promoting sweepstakes games not related to the bona fide sale of goods, services, or property.
• Simulated Gambling Devices: Offering or promoting sweepstakes using simulated gambling devices is criminalized.
• Permitted Sweepstakes: Sweepstakes are only permissible if offered by retail grocery chains and related to the sale of groceries, with no prizes redeemable for cash.
• Penalties: Violations are treated as professional gambling, considered a Class A misdemeanor, and deemed as unfair or deceptive trade practices.

Amendments to Senate Bill 1235

The bill underwent amendments during its legislative journey, including the removal of a ban on lottery couriers and a provision allowing online casinos enter into compacts with other markets in the country.

Montana Was the First State To Ban Sweepstakes Casinos

Following Connecticut’s lead, Montana has enacted its own ban on online sweepstakes casinos with Senate Bill 555, signed by Governor Greg Gianforte.

Details of Montana’s Legislation

• Broad Ban: The law prohibits any platform, website, or application from knowingly transmitting or receiving gambling information or allowing bets or wagers via any currency form, including dual currencies used by sweepstakes operators.
• Consequences: Violators face felony charges and up to 10 years in prison.

The Nationwide Trend: More States Considering Bans

While Connecticut and Montana have made the move, other states are considering similar legislation.

New York’s Movement

New York’s Attorney General, Letitia James, recently issued cease-and-desist letters to 26 sweepstakes casino operators and the Senate approved a measure to ban online sweepstakes contests that simulate casino-style games.

This measure is now under further consideration by the Assembly Ways and Means Committee. Notably, several online sweepstakes operators exited New York after receiving the cease-and-desist orders from James.

Other States in Discussion

Lawmakers in Louisiana, Maine, Ohio, and New Jersey are also exploring banning sweepstakes, with Maine officials warning residents against participating in such games.

But efforts in Arkansas, Florida, Maryland, and Mississippi failed to gain full legislative approval.

The Social and Promotional Games Association (SPGA) expresses frustration with the legislative moves, arguing that they confuse legal promotional sweepstakes with unregulated gambling and could stifle innovation and consumer choice.

“Unfortunately, Connecticut’s sweeping legislation fails to distinguish between lawful promotional sweepstakes and unregulated gambling, despite the absence of any meaningful evidence of consumer harm,” the SPGA said in a statement. “Instead of engaging with operators who prioritize consumer protections, compliance, and responsible standards, lawmakers have chosen a path that will harm innovation, limit consumer choice, and push compliant businesses out of the state.”

Sweepstakes Casino Regulations: A Shifting Landscape

The legal landscape for sweepstakes and promotional gaming platforms is shifting.

While states like Connecticut and Montana are taking decisive action against these platforms, other states are in the deliberation phase. As the discussion around sweepstakes bans continues, the industry and policymakers need to engage in informed dialogues to balance regulation with consumer protection and industry growth.