Prediction Markets Hysteria Helps Sweepstakes Casinos Stay Under the Radar
Posted on: April 21, 2026, 11:58h.
Last updated on: April 21, 2026, 12:00h.
- Prediction markets remain the hot topic in the US gaming industry
- That could be benefitting sweepstakes casinos from being outlawed through state legislation
Last year, before prediction markets began offering trading contracts involving sports outcomes, online sweepstakes casinos were fielding the bulk of the legal, regulated gaming industry’s rage. Things have since changed, with the focus now primarily on prediction markets, and that’s been a winning hand for the sweepstakes realm.
Sweepstakes casinos are marketed as social gaming websites and apps that allow players to spin online slot machines and play interactive table games for fun. However, the platforms offer a secondary digital currency, commonly called sweeps coins, which supposedly allow the user to enter online casino sweepstakes games, where winning credits can be redeemed for cash withdrawals.
Online casino gambling with slots and table games is only allowed in eight states, including Connecticut, Delaware, Maine, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Those states and jurisdictions without iGaming have argued in cease-and-desist orders and legal filings that sweepstakes casinos violate state gaming laws by utilizing the dual-currency sweepstakes model.
Sweepstakes casinos counter that they operate promotional games, not unlike a retailer running a sweepstakes promotion, with an often-cited example being McDonald’s Monopoly Game.
Going Under the Radar
As attorneys general, gaming regulators, and lawmakers focus on prediction markets, sweepstakes casinos have enjoyed being out of the limelight. It’s resulted in proposed state bans of the games being largely unsuccessful.
In March, legislation in Massachusetts to make it unlawful “for any person or entity” to conduct or operate online sweepstakes within the commonwealth failed to muster enough support. The Massachusetts Joint Economic Development and Emerging Technologies Committee instead voted to send House Bill 4431 for further review.
Last week, the Maryland General Assembly adjourned without getting a sweepstakes casino ban past the finish line.
Maryland House Bill 295, a proposed ban on “interactive games from illegal markets,” proposed penalties for those running an online sweepstakes casino of up to $100,000 in fines and three years’ imprisonment.
HB295 passed the Maryland House of Delegates in March with a 105-24 vote. But the bill stalled in the state Senate Committee on Budget and Taxation. The Maryland General Assembly adjourned for 2026 on April 13.
Maryland is a hub of the ongoing prediction markets legal challenge, as the state’s US District Court is where a federal lawsuit brought by the Maryland Lottery and Gaming Control Agency against Kalshi was initiated. The matter has since been appealed to the US Court of Appeals for the Fourth Circuit.
Thirty-eight states have filed motions in support of Maryland in its claims that the Commodity Exchange Act, which federally regulates prediction markets, does not preempt a state’s gaming laws.
Proposed sweepstakes casino bans in Utah, Mississippi, and Virginia also failed in 2026. Similar legislation in Tennessee, Oklahoma, and Maine faces long odds in the closing weeks of their respective legislatures.
Indiana, Minnesota Sweepstakes Bills
One state that did outlaw sweepstakes casinos in 2026 was Indiana. House Bill 1052 amended the state’s gaming law to define and establish civil penalties for conducting sweepstakes games.
Minnesota could join Indiana in banning sweepstakes casinos, as its 2026 session runs through May 18. Senate File 4474 would make online sweepstakes illegal in Minnesota, but the bill has not yet gone up for a floor vote.
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