The ban will take effect on October 1, 2025, prohibiting any internet gambling that uses currency. This move closes a growing loophole that allowed sweepstakes platforms to operate where traditional online casinos were barred.
Background of the Ban
Online sweepstakes casinos use a dual currency system: one free to play and another redeemable for cash prizes. Users cannot buy these coins directly but receive them through promotions or as gifts with fun-only token purchases. This setup let platforms skirt state rules by claiming they weren’t real casinos.
Senate Bill 555 amends Montana’s gaming code to include “internet gambling” under its definition of prohibited games. Any platform allowing bets or wagers using currency is now illegal. Tribal casinos, sports betting under tribal compacts, and limited gaming in bars remain unaffected.
Violating the new law is a felony, punishable by up to $50,000 in fines and/or 10 years in prison. These penalties aim to deter operators and protect consumers from unregulated gambling.
Before Montana’s action, twelve states considered similar bills but none passed. Proposals in Mississippi and Maryland stalled, while Florida and Arkansas rejected bans. Montana’s clear definitions and strict penalties set a new benchmark.
Industry Reaction and Next Steps
The Social and Promotional Games Association (SPGA) condemned the ban as “vague and sweeping,” warning it could criminalize ordinary digital promotions like retailer sweepstakes or loyalty programs.
Major operator VGW, known for Chumba Casino, announced it will exit Montana before the law takes effect. Other platforms are reviewing their models to avoid the state or adjust operations.
Lawmakers in Connecticut, Louisiana, and Ohio are moving similar bans through their legislatures, signaling growing momentum against sweepstakes casinos.
Montana’s decision marks a pivotal moment in U.S. gaming law. By closing the sweepstakes casino loophole, the state aims to protect consumers and uphold clear regulations. As other states consider Montana’s approach, the debate over online sweepstakes gaming will continue to shape the industry nationwide.
