The landscape of federal sweepstakes gaming laws is a tricky one to navigate even for us. There can often be a lot of confusion around federal vs state laws, and the types of federal protections that these platforms have.
Sweepstakes casinos and prediction markets are often used as a comparison, not because theyâre similar, but because the way theyâre regulated is so different. Prediction markets have a dedicated federal body that governs them, and therefore provides legal projections. Whereas sweepstakes casinos are regulated at the state level, with no federal protections. So letâs break it all down.
Best-rated sweepstakes casino this month
Get 200% More Coins on First Purchase – 1.5M CC + 75 SC
4.6/5
Visit Casino
T&Cs apply, 18+
An overview of prediction markets vs sweepstakes casinos regulations
Sweepstakes casinos are a very popular way of enjoying casino-style games in the US. you can play hundreds of titles from big time game studios using virtual currencies. There are no required Gold Coin package purchases and you can often pick up these virtual currencies for free. But there is often some confusion around the way that sweepstakes casinos are regulated. Currently, it’s based on state law whether sweepstakes casinos are available to play or not. This means that in some states you can sign up and in others you canât.
Federal protections arenât as strong for sweepstakes casinos as they are for other platforms like prediction markets. The primary reason for this is that there isnât a federal governing body that has been specifically designed to govern sweepstakes casinos. The legality of sweepstakes casinos is built on a principle called the âno-purchase-necessaryâ doctrine. This essentially says that these platforms arenât considered to be gambling because there are ways to play for free. When you sign up, youâre given Gold Coins and Sweeps Coins to play with and there are then many ways to claim more later on. In stark contrast, the Commodity Futures Trading Commission regulates all prediction markets, giving them far stronger protections.
So because of this, sweepstakes casinos have been regulated at the state level. But these platforms are now coming up against issues in states where they were previously okay to operate. This is happening in states like California and New York where specific laws banning casino-style online games that are based on dual-currency sweepstakes have been enforced. Unless some kind of federal regulations come into place protecting these sites, then states will be able to continue to make these decisions.
Our top recommended sweepstakes casino
25 SC and 25K GC signup bonus
4.7/5
Visit Casino
T&Cs apply, 21+
How are prediction markets and sweepstakes casinos different?
Prediction markets are protected federally under US law, which means that states canât just ban them. However, they are considered to be a bit controversial because they operate in a sort of grey area where theyâre considered âevents contractsâ. So under the Commodity Exchange Act, prediction markets like Kalshi and Polymarket operate as CFTC-regulated Designated Contract Markets. But many states are starting to push back, stating that prediction markets are actually operating as unlicensed gambling sites. Although states canât ban prediction markets in their entirety, those with heavy sports betting restrictions (like New York) can restrict the user’s ability to trade on sports event contracts. And this is exactly what weâre seeing happen right now.
With sweepstakes casinos, like the ones we review here at Sweeptastic, there are far fewer federal protections, which means that the states can just change the laws as they see fit. There are federal laws that restrict unlawful gambling, but there is nothing that specifically governs the way that sweepstakes casinos operate. In ways, this is a positive as it means that these platforms are able to operate in states with restrictions on traditional online casinos. But the downside is also that the state regulations tend to change quite frequently. Weâve seen quite a few states recently tighten their rules around sweepstakes casinos, leading to several big platforms no longer being able to operate there. If sweepstakes casinos continue to operate after these new laws have passed, they often face hefty fines.
Conclusion – Sweepstakes casinos have fewer federal protections
Overall, the lack of federal protections that sweepstakes casinos have all stems from the fact that there is no specific federal governing body. Because of this, thereâs no one enforcing these laws at a federal level, in the way that the Commodity Futures Trading Commission does for prediction markets. This means that sweepstakes casinos are solely controlled at the state level, with each state deciding for itself how strict or lenient these laws will be. The result of this is constantly changing laws, with many states switching from allowing sweepstakes casinos to banning them to allowing them again. It can make it quite difficult for every sweepstakes casino to operate in every state, because the regulations can be so different. So if youâd like to see which sweepstakes casinos are available in your state, weâve popped a list in the page banners.
Sweepstakes casino to try now
Get up to 500K Gold Coins + 105 FREE SC + 1000 VIP points
4.2/5
Visit Casino
T&Cs apply, 18+
Ă
To use this feature, you need to create an account.
Join our community and enjoy these benefits:
Share your own experiences with all listed providers
Vote on reviews and receive votes on your own.
Bookmark your favorite casinos and access them across all your devices.
