Sweepstakes casinos operate in many US states as prize promotions where no purchase is necessary. Since 2025, a growing number of states have passed laws that restrict or ban them. Whether you can play depends on the state you are in.
This guide explains the legal test, what the new state laws do and how to check your own state. Verify current laws in your jurisdiction before playing.
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Sweepstakes Casinos Rely on the No-Purchase Rule
A sweepstakes casino can operate because US promotion law treats a free-entry prize contest differently from an illegal lottery. The difference comes down to whether a player must pay to take part.
A 2023 Klein Moynihan Turco article says a lottery “is made up of 3 elements: prize, chance, and consideration.” The firm says that if consideration is removed, a lottery becomes a legal sweepstakes.
| Element | What it means | How a sweepstakes casino handles it |
|---|---|---|
| Prize | Something of value can be won | Present: prize coins can be redeemed for cash prizes or gift cards |
| Chance | Luck decides the result | Present: game results are random |
| Consideration | The player must pay or give something of value to enter | Removed: prize coins can be claimed free, so no purchase is necessary |
Sweepstakes casinos keep prize and chance but remove consideration. That is the operators’ legal argument, and some new state laws reject it even when coins are free.
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The Free Entry Route Is What Makes the Model Work
The free route is called an alternative method of entry, or AMOE. Many sweepstakes casinos use a mail-in request, where you post a handwritten card to the operator and receive free prize coins.
Klein Moynihan Turco says AMOE entrants “must have an equal opportunity to win the same prizes as those that pay to enter.” The firm also says the free route should appear in the rules and the entry flow.
Each operator sets its own mail-in steps, and small mistakes can void a request. Our guide to how sweepstakes casinos work shows where operators publish their mail-in rules.
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Sweepstakes Casinos Use Two Kinds of Coins
Many sweepstakes casinos run two currencies. One is for fun play and has no prize value, and the other can be redeemed for prizes.
A May 2026 Venable article says players often get the second currency through promotions, daily bonuses or a free AMOE. Operators argue that this free access removes consideration.
Venable says regulators, lawmakers and people filing lawsuits are examining whether that argument holds. Our Sweeps Coins explainer covers how the prize coin works.
A Growing Number of States Restrict or Ban Sweepstakes Casinos
States have started passing laws aimed at the two-coin model. As of May 22, 2026, Venable counted new laws in five states in 2025 and four more in 2026.
More states acted after that article, so any count goes out of date quickly. The table below shows Clovr’s latest status for each state. Verify current laws in your jurisdiction before playing.
What the New York Law Covers
New York’s Senate Bill S5935A was signed on December 5, 2025, and took effect right away. It bans online sweepstakes games that use a “dual-currency system of payment” and offer cash prizes.
The law also covers companies that support these games, including payment processors, geolocation providers, game suppliers and media affiliates. Fines run from $10,000 to $100,000 for each violation.
What the California Law Covers
California’s Assembly Bill 831 took effect on January 1, 2026. It makes it unlawful to operate, offer or promote an online sweepstakes game that uses two kinds of coins.
A November 2025 Frankfurt Kurnit Klein & Selz alert says the law treats free promotional coins as a form of payment. It also reaches payment processors and media affiliates that knowingly support these games. The law carries criminal penalties, including fines and possible jail time.
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New State Laws Target Operators and Their Partners
The New York and California laws focus on the companies that run, support or promote sweepstakes games. Law-firm summaries Clovr reviewed do not describe penalties for players.
A ban can still affect you. Each operator’s Terms say when it can close your account and what happens to unused coins. Clovr is not a law firm, so ask a lawyer about a specific legal question.
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How to Check Whether a Sweepstakes Casino Is Allowed Where You Live
Four checks tell you whether a sweepstakes casino accepts players in your state. Do them before you buy anything or send a mail-in request.
- Open the operator’s Terms and find its restricted or prohibited states list.
- Check the mail-in rules too, because some operators exclude extra states from free entry.
- Turn on location services, since operators check your location before you can play.
- Check your findings against Clovr’s state-by-state sweepstakes casino guides.
Some operators also limit certain states to the fun-play coin only. In those states, you can play for fun but cannot redeem prizes.
Sweepstakes Prizes Are Taxable Income
Prizes you redeem from a sweepstakes casino count as taxable income. The IRS instructions for Form 1099-MISC tell payers to report prizes from a free-entry sweepstakes in Box 3, “Other Income.”
Starting with the 2026 tax year, the reporting threshold is $2,000, and it may rise with inflation from 2027. Section 70433 of the One Big Beautiful Bill Act raised it from $600.
The threshold only decides whether the operator sends you a form. You still owe tax on smaller amounts, so speak with a tax professional if you redeem large prizes.
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The FTC Acts Against Misleading Sweepstakes Promotions
The FTC takes action when a sweepstakes misleads people about whether they must buy something to enter. In a proposed Publishers Clearing House settlement, the FTC sought disclosures “that consumers don’t have to buy anything to enter a sweepstakes.”
Sweepstakes casinos also show “No purchase necessary” and publish a free entry route in their rules. The Clovr sweepstakes casinos hub compares the sites Clovr has reviewed.
Are Sweepstakes Casinos Legal FAQ
Frequently asked questions
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Are sweepstakes casino winnings taxed?
Yes. Sweepstakes casino redemptions are taxable as Other Income on Schedule 1 of Form 1040. Operators file Form 1099-MISC once cumulative redemptions reach $2,000 in tax year 2026. The One Big Beautiful Bill Act raised that threshold from $600.
Income below the threshold is still taxable even when no form arrives. Clovr is not a tax advisor.
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Can I get in trouble for playing at a sweepstakes casino?
No. No state sweepstakes statute passed between 2025 and 2026 creates a penalty for the individual player. The statutes name operators, suppliers, payment processors, and affiliates.
The real risk in a closed state is a forfeited Sweeps Coins balance rather than prosecution. This is not legal advice.
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Can I play at gold coins only casinos instead?
Yes. Gold-coin-only social casinos are legal in all 50 US states because nothing on the platform converts to cash. That is also the tradeoff, since there are no cash prizes and no redemption of any kind. Social casinos remain available in every state, including the ones that closed the sweepstakes model.
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Are there other legal casino-style alternatives?
Yes. Three alternatives exist for players in states that closed sweepstakes casinos.
- Gold-coin-only social casinos, available in all 50 states with no cash redemption.
- State-licensed real-money online casinos, available only in the states that license them.
- Single-currency platforms such as Card Crush.
Card Crush is the most direct alternative for casino-style games with real prize redemption. Card Crush launched in December 2025 under Vision NL Limited. The platform runs a single-currency model rather than the dual-currency sweepstakes structure.
Players buy Mystery Boxes containing Mystery Coins. Mystery Coins redeem at one coin to one dollar after a single playthrough. The minimum cash redemption is 75 Mystery Coins. Card Crush is 21 and over in every state it serves.
Card Crush pairs RPG-style card battles with casino games. That makes it a different product rather than a like-for-like swap.
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Are sweepstakes casinos legal in all 50 states?
No. Sweepstakes casinos are legal in most US states but closed in a minority through statute or enforcement. Thirteen states had closed the model as of August 2026, and Oklahoma joins them on November 1, 2026. Clovr’s state guides carry current status for each one.
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Are sweepstakes casinos considered gambling?
No. Sweepstakes casinos are not classified as gambling in most states because no payment is required to enter or to win. Removing payment removes consideration, one of the three elements US law needs to treat an activity as gambling. States that closed the model did so by writing new definitions, not by applying existing gambling law.
Related Reading
These Clovr guides explain the coins, the free entry route and how to find free prize coins.
- Our guide to how sweepstakes casinos work follows the steps from sign-up to prize redemption.
- Our no-purchase bonus guide covers free coin offers that need no purchase.
- The Clovr free SC coins guide lists ways to collect prize coins without a purchase.
- The Clovr responsible gaming page explains how to keep sweepstakes play in check.
- Find legality of sweepstakes casinos by state
Clovr may earn a commission when you sign up through affiliate links on this page. This never affects our reviews, which stay independent and unbiased.
Sweepstakes play should stay fun. If you or someone you know needs support, visit the National Council on Problem Gambling at ncpgambling.org or call 1-800-GAMBLER.
