Montana becomes first state to ban sweepstakes casinos

Montana has made history as the first US state to officially ban sweepstakes casinos, following the signing of Senate Bill 555 (SB 555) into law by Governor Greg Gianforte.

The legislation, which takes effect on October 1st, 2025, marks a significant shift in the legal landscape for online gambling and sweepstakes gaming platforms operating within the state.

SB 555 broadly targets all forms of internet gambling, explicitly banning “any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”

While the law does not specifically name sweepstakes casinos, its language encompasses the dual-currency model used by popular platforms such as Chumba Casino and Luckyland Slots, where users play with free coins but can purchase additional coins for cash prizes.

Violators of the new law face severe penalties, including felony charges, fines of up to $50,000, and up to 10 years in prison per offense.

The law also applies to offshore operators and marketers, expanding Montana’s enforcement reach beyond state borders.

The Social and Promotional Games Association (SPGA), a trade group representing sweepstakes operators, has strongly criticised the bill, calling it ‘reckless’. The association warns that its vague language could unintentionally criminalise legitimate digital promotions used by businesses like hotels, airlines and even fast-food chains.

The SPGA argues that the law sets a dangerous precedent, potentially undermining consumer trust and business innovation.

Some major sweepstakes operators, including Virtual Gaming Worlds (VGW), have already exited the Montana market in anticipation of the law’s enforcement.

The bill’s passage follows unsuccessful attempts to ban sweepstakes casinos in other states, such as Mississippi, Florida, Arkansas, and Maryland, though similar legislation is now being considered in Connecticut, Louisiana, and Ohio.

With the ban in place, Montana residents will no longer have access to sweepstakes casinos offering real cash prizes. However, the law does allow for social casinos that offer entertainment-only gameplay with no prize redemption, providing a potential path for operators wishing to maintain a presence in the state.

Critics warn that players may now turn to offshore, unregulated platforms, which lack the consumer protections previously offered by licensed sweepstakes sites. Montana’s decisive action is expected to influence the national debate on sweepstakes casinos and may prompt other states to consider similar measures.

For now, the state has set a new standard in the regulation of online gambling, with enforcement set to begin this October.