Far-reaching consequences of the issue at hand

In the ever-evolving landscape of U.S. gaming policy, a significant debate is unfolding about the legitimacy of sweepstakes and the boundaries between promotional contests, social gaming, and regulated gambling.

The intensifying scrutiny has led to enforcement actions, with states such as New York and Louisiana issuing cease-and-desist orders to various companies, including Australian operator Virtual Gaming Worlds (VGW). New Jersey, in particular, has taken a firm stance, becoming the sixth state this year to take legislative action against sweepstakes casinos.

The latest move comes from New Jersey, which has signed legislation to prohibit sweepstakes-style online casinos. The new law, Assembly Bill 5447, empowers state regulators to enforce the ban and imposes penalties on operators offering the games.

The measure cleared the state legislature in June before receiving Governor Phil Murphy's approval. Meanwhile, opponents argue that the sweepstakes model exploits loopholes in sweepstakes law to provide online gambling in states where it remains illegal.

The American Gaming Association (AGA) has conducted a study that found 90% of regular sweepstakes players consider the activity either "definitely" or "probably" gambling. This finding adds fuel to the debate, with casino lobbyists contending that sweepstakes are merely disguised forms of online gambling.

However, the Social Gaming Leadership Alliance (SGLA) and the Social and Promotional Games Association (SPGA) argue that New Jersey's measure misrepresents the business model of sweepstakes operators. They warn that New Jersey's ban could damage New Jersey's reputation as a technology-friendly hub.

The debate is not limited to New Jersey. California, one of the largest grey markets for sweepstakes, is considering its own prohibition. Other states, including Connecticut, Montana, and New York, have approved similar bans, while Nevada enacted a broader law targeting unlicensed gambling without specifically banning sweepstakes.

Louisiana's legislature passed a prohibition, but Governor Jeff Landry vetoed it. The veto, however, has not deterred the mounting pressure on the sweepstakes industry, with multiple states advancing bans and regulators stepping up enforcement.

The legislative push against sweepstakes casinos highlights broader questions about where to draw boundaries between promotional contests, social gaming, and regulated gambling. As of 2025, there are no specific search results indicating which states have enacted laws against sweepstakes casinos or which states have related laws still in draft form.

Former South Carolina Congressman Jeff Duncan leads the Social Gaming Leadership Alliance (SGLA), advocating for a clearer definition of social gaming and a more balanced approach to gaming policy. An SPGA spokesperson stated that Governor Murphy has an opportunity to "listen to facts, not fear."

In conclusion, the debate between casino lobbyists and sweepstakes trade groups is likely to continue, with each side presenting differing views on the nature of sweepstakes. The future of sweepstakes in the U.S. remains uncertain, with states taking various approaches to regulating or banning the practice.