An A-Z analysis of the legality of online sweepstakes, casinos, and sports betting in the United States
Gambling has woven itself into the fabric of American society. This form of entertainment started as a whispered subject but has evolved into a billion-dollar industry. Today, people can comfortably visit a land-based casino without shame or play on their mobile or desktop in the comfort of their homes.
However, several things have happened to shape the gambling industry. For instance the overruling of the Professional and Amateur Sports Protection Act (PASPA) of 1992, states earned the freedom to decide the future of sports betting in their individual jurisdiction.
States have taken into their hands gambling matters, each crafting regulations and laws as they see fit. In this article, we embark on a journey across all 50 US states. We will explore the legality of sweepstakes casinos, online casinos, and sports betting. Our aim is to shed light on one of the most complex topics, helping you understand gambling laws and trends in the industry.
| State | Sweepstakes casinos | Online casinos | Sports betting |
| Alabama | Grey area | ||
| Alaska | ✔️ | ||
| Arizona | ✔️ | ✔️ | |
| Arkansas | ✔️ | ✔️ | |
| California | ✔️ | ||
| Colorado | ✔️ | ✔️ | |
| Connecticut | ✔️ | ✔️ | ✔️ |
| Delaware | ✔️ | ✔️ | ✔️ |
| Florida | Grey area | ✔️ | |
| Georgia | ✔️ | ||
| Hawaii | ✔️ | ||
| Idaho | Grey area | ||
| Illinois | ✔️ | ✔️ | |
| Indiana | ✔️ | ✔️ | |
| Iowa | Grey area | ✔️ | |
| ‘Kansas | ✔️ | ✔️ | |
| Kentucky | ✔️ | ||
| Louisiana | ✔️ | ✔️ | |
| Maine | ✔️ | ✔️ | |
| Maryland | ✔️ | ✔️ | |
| Massachusetts | ✔️ | ✔️ | |
| Michigan | ✔️ | ✔️ | |
| Minnesota | ✔️ | ||
| Mississippi | ✔️ | ✔️ | |
| Missouri | ✔️ | ||
| Montana | ✔️ | ✔️ | |
| Nebraska | ✔️ | ✔️ | |
| Nevada | ✔️ | ✔️ | |
| New Hampshire | ✔️ | ✔️ | |
| New Jersey | ✔️ | ✔️ | |
| New Mexico | ✔️ | ✔️ | |
| New York | Grey area | ✔️ | |
| North Carolina | ✔️ | ✔️ | |
| North Dakota | ✔️ | ||
| Ohio | ✔️ | ✔️ | |
| Oklahoma | ✔️ | ||
| Oregon | ✔️ | ✔️ | |
| Pennsylvania | ✔️ | ✔️ | ✔️ |
| Rhode Island | ✔️ | ✔️ | ✔️ |
| South Carolina | ✔️ | ||
| South Dakota | ✔️ | ||
| Tennessee | ✔️ | ✔️ | |
| Texas | ✔️ | ||
| Utah | ✔️ | ||
| Vermont | ✔️ | ||
| Virginia | ✔️ | ✔️ | |
| Washington | Illegal | ||
| Washington D.C. | ✔️ | ||
| West Virginia | ✔️ | ✔️ | ✔️ |
| Wisconsin | ✔️ | ||
| Wyoming | ✔️ | ✔️ |
States where online sweepstakes casinos are legal
Sweepstakes casinos are platforms offering casino games such as slot machines, blackjack, roulette, and others without the traditional element of playing with real money. They are also referred to as social casinos. Instead of wagering real money, these casinos use virtual currencies.
Sweepstakes casinos are not entirely regulated. Their operators don’t need to apply for licenses from regulators to operate. Instead, these sites circumvent gambling laws by turning the gameplay into sweepstakes. In other words, these sites offer players two types of currencies to play casino games while allowing them to win prizes without spending their real money.
The two types of virtual currencies used at sweepstakes casinos are gold coins and sweep coins. Different social casinos can use different words to refer to these currencies. For example, Fortune Coins is one of the top online sweepstakes casinos in the country. The social casino uses gold coins and refers to sweep coins as fortune coins. Meanwhile, Wow Vegas refers to gold coins as Wow coins and sweep coins as so.
Whichever the case, a casino will explain the type of coins you can use and how you can use them. Ideally, gold coins are the currencies you can use to play casino games leisurely. The only thing you can win from playing with gold coins is more gold coins. Players can purchase gold coins. They are sold in packages. For instance, you can spend $9.99 to buy 1.5 wow/gold coins at Wow Vegas online sweepstakes casino.
You can’t buy sweep coins. Instead, you can earn a few coins every time you buy a gold coins package. Sweep coins are considered to have more value than gold coins. In fact, sweepstakes casinos allow players to redeem sweep coins for real prizes such as money, vacation, merchandise, and other rewards.
Online sweepstakes casinos are not legalized per se. States just accommodate them. However, states such as Washington and Idaho adamantly prohibit these casinos. Florida and New York allow these casinos to operate. However, they limit the amount of prizes a player can win.
Meanwhile, sweepstakes casinos operate in Alabama. Unfortunately, the game providers of these casinos are susceptible to lawsuits. For instance, Playtika is currently fighting a lawsuit in Alabama on allegations it provides games of chance which is one of the elements of gambling.
Sweepstakes casinos must follow certain regulations. For instance, they shouldn’t require players to spend money to win prizes. However, these sites don’t require permits to run. As such, you must carefully choose a reputable site to have a good experience.
States with legal online casinos
Most US states have legal land-based casinos. Unfortunately, legalizing online casinos has been a slow process.
As you can tell from our table above, only seven states have legal online casinos. This includes Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia and Rhode Island.
The lack of online casinos in other states is not a result of not trying to legalize. Many states have introduced bills seeking to legalize online casinos only to fail in one house or both.
Some introduce the bill while a legislative session is coming to an end, leaving not enough time to deliberate on the bill or pass it. However, this is not something that would have blocked Rhode Island’s chance to have online casinos.
The state was the last to introduce an online casino bill in 2023. This happened a few weeks before the end of this year’s legislative session. Several lawmakers fought the bill unsuccessfully. Before the session could close, Rhode Island passed the bill, becoming the seventh state to legalize online casinos. The state is scheduled to launch the casino in the first quarter of 2024.
New Jersey, Delaware, and Nevada were the first states to legalize online casinos in 2013. This was after the Department of Justice reinterpreted the Wire Act.
Ideally, the Wire Act is a statute prohibiting the use of wire communication devices such as phones to facilitate betting across state lines. In 2011, the Department of Justice said the act applied to sports betting only. Since then, the issue has been argued in courts multiple times. But, the act is one of the reasons legalized online casino operators can only operate within a specific jurisdiction.
While the casino can be accessed by anyone from anywhere, these sites use geo-restrictions. This protects the operators from possible lawsuits.
Pennsylvania legalized online casinos in 2017 followed by West Virginia in 2019. Michigan legalized online casinos in 2021, with Rhode Island closing the list.
Most states have several operators running online casinos. However, Rhode Island will only have one operator, Bally’s Corporation. The firm is also the sole operator of land-based casinos in the state.
The legalization of online casinos is usually fought by casino moguls. These magnates feel online casinos will cannibalize land-based casinos. Yet, various studies have proven otherwise.
States with legal online sports betting
Online sports betting has experienced tremendous growth. With states legalizing sports betting, improved internet connection, and advancements in technology, sports betting has attracted new bettors, spurring the market.
Over 33 US states have legalized sports betting with 24 of these permitting online wagering. Most have applied various restrictions. For instance, a state may have legalized online sports betting. However, the betting is only limited to the land hosting the sportsbook.
A good example would be Florida. The state legalized mobile sports betting in 2021. This would allow bettors to place bets online as long as they were within the specific boundaries of the sportsbook operator.
The legal sports betting landscape changed in May 2018 when the US Supreme Court overruled PASPA. This move allowed each state to legalize, regulate, and tax sports betting.
Being a multi-billion industry, more states have legalized sports wagering to help keep the revenue within the states. Ideally, people still place bets at offshore sportsbooks. By legalizing sports betting in a state, the jurisdiction is able to retain most of the revenue that would otherwise go offshore.
Yet, some states are not ready to legalize sports betting. This includes Texas, Alabama, Alaska, Idaho, Georgia, Missouri, Oklahoma, South Carolina, and Utah. Some of these have never introduced sports betting bills even once.
Usually, a lawmaker has to introduce a bill during a legislative session. The bill has to pass both houses. Once it does, the state governor signs the bill into law. It takes at least 6 months before sports betting launches because the gambling regulator has to take care of regulations and other things like rewarding licenses.
Often, a sports betting operator has to partner with a land-based casino before launching even if it plans to offer online wagering. Some of the leading online sports betting operators include DraftKings, FanDuel, Caesars, BetMGM, BetRivers, Hard Rock, Unibet, PointsBet, bet365, and Borgata.
Only wager at legalized online platforms
The legal landscape of online sweepstakes, casinos, and sports betting is ever-evolving across the US. Starting with sweepstakes casinos, these platforms operate within a unique legal framework that distinguishes them from traditional casinos. Social casinos are especially popular because they provide the same entertainment as traditional casinos where online casinos are illegal.
Online casinos have seen a slow transformation. Over 40 states have decided to be cautious about them while seven have embraced them. Meanwhile, most states are flexible about online sports betting.
Despite the progress, some challenges still persist. Players fall victim to illegal gambling sites. The only way to avoid being a victim yourself is to stick to state-legalized sites or choose a provable reputable site.