Montanta’s Governor, Greg Gianforte, signed off on a bill to officially prohibit sweepstakes casinos, becoming the first US state to outlaw the platforms.
Senate Bill 555 tackled the sweepstakes model by focusing on banning dual-currency gambling. Many sites allow users to engage in casino games using virtual cash or digital coins, which have so far bypassed most state gambling laws.
The bill states, “The term internet gambling includes online casinos, by whatever name known, which constitute internet gambling and there are prohibited. This includes but is not limited to 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.”
The bill was introduced in late March and assigned to the Business, Labor and Economic Affairs Committee. After gaining approval there, it was passed on the Senate floor in April. It then went to the House, where it progressed through the Business and Labor committee before passing on the House floor. In total, it took just under two months to get through all the necessary steps to make it into law.
Violations of the law are classified as felonies, punishable by fines up to $50,000 and imprisonment for up to 10 years.
SPGA speaks out against the bill
The Social and Promotional Games Association (SPGA), a lobby group for social and sweepstakes casinos, voiced its disapproval of the legislation in Montana.
A spokesperson commented, “The SPGA strongly condemns the enactment of Senate Bill 555, which makes Montana the first state to ban online sweepstakes-style games, without even using the word sweepstakes.
“This vague and sweeping law reclassifies legitimate, free-to-play promotional games as “internet gambling,” ignoring the clear legal and operational distinctions between sweepstakes platforms and real-money online casinos. Under SB 555, even platforms with no purchase required and robust consumer safeguards could now face criminal penalties.”
As the SPGA notes, there is no explicit mention of sweepstakes casinos in the bill, but lawmakers have instead focused on the business model of the operators that use a dual-currency system. The SPGA argues that such promotions are widely used by businesses across all sectors, including Starbucks and McDonald’s.
McDonald’s Monopoly, for example, gives customers the chance to win prizes by purchasing products.
Regulating sweepstakes casinos
The widespread use of similar models has made it difficult for lawmakers to regulate social and sweepstakes operators. Recent bills have failed to pass in Arkansas, Florida, Mississippi, and Maryland.
Although Montana became the first state to pass legislation addressing the rise of sweeps, the gambling laws in Washington and Idaho also make it illegal for any form of online casinos, including sweepstakes.
In Washington, sweepstakes operator High 5 Games, was forced to pay a $25 million settlement in a lawsuit brought by a resident.
There remain active bills in New York, New Jersey, Connecticut, and Louisiana that are similar to the bill passed in Montana in focusing on casinos that use a dual-currency system.
Montana gambling industry
Online casinos are not currently legal in the state, and Montana sports betting is also restricted to the state-run Sports Bet Montana platform.
Casinos are run through the state’s tribes, and video gaming terminals are widely available at licensed establishments. There are an estimated 1,400 licensed gambling operators with more than 16,000 video gambling machines across the state.
The strict rules around online gambling have seen residents turn to alternative operators such as sweepstakes, but with the new law coming into force in October this year, gamblers will have to seek out other options.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
