California lawmakers recently introduced legislation to ban sweepstakes casinos from operating in the most populous state in the US.
That’s on the heels of actions by several other states to either ban sweeps or order sweeps companies to cease operations in their state.
Could Texas, which tolerates sweepstakes casinos, be next to take aim at the online games?
Texas sweeps operate in ‘gray’ area of law
Sweepstakes casinos in Texas operate in a legal “gray” area, as they are not explicitly legal or illegal under state law.
So far, Texas officials haven’t directly targeted sweeps operators or offered public opinions on their legal status, nor has there been any legislation proposed in the Texas Legislature to restrict them.
That could change in the future, especially as more and more states take action against sweepstakes casinos.
Texas strictly limits gambling
The Texas government has been consistently conservative in relation to gambling in the Lone Star State. More correctly stated, most Texas officials strongly oppose the expansion of gambling in the state.
For example, Texas sports betting remains illegal even though the majority of US states, 38 currently, allow it. The Lone Star State also doesn’t have any commercial casinos, and the only tribal casinos are far away from high population areas of the state.
Cardrooms are somewhat tolerated, but even those have come under fire from authorities over the years.
Then there’s real-money Texas online casinos. Those, too, are outlawed. Sweepstakes casinos have found a niche in Texas by offering games that don’t directly use real money.
Sweepstakes casinos continue to operate in states that haven’t taken action against them (including Texas) based on the understanding that they are not illegal gambling because no payment is required. The casino-style games (including slots and table games) are always free to play, but there is the option to purchase a virtual currency, often called “Gold Coins.”
Players receive another form of currency, “Sweepstakes Coins,” for free as a bonus when making a purchase or through other promotions. Sweeps Coins can be accumulated through gameplay and redeemed for prizes (usually cash and/or gift cards).
By operating on this model, sweeps casino operators believe they are adhering to state and federal online gambling laws. For example, the Texas Business and Commerce Code explicitly prohibits someone from conducting a sweepstakes that requires a purchase to enter.
Texas legislative action against sweeps unlikely anytime soon
Texas’ restrictive approach to online gambling suggests that efforts to curtail sweepstakes casino operations in the state could certainly be on the table at some point. This year, state legislatures in Montana, Connecticut, Nevada, Louisiana, and New York passed bills prohibiting sweepstakes casinos from operating in their respective states.
Legislation in New Jersey is quickly advancing in its statehouse.
In Texas, time is on the side of the sweeps. The Texas Legislature recently ended its 2025 regular session and will not meet again until 2027.
Texas Gov. Greg Abbott did call for a special session that began on June 23, but none of the six bills lawmakers will consider have anything to do with sweepstakes casinos or gambling.
Abbott, however, has the power to add additional items to the agenda, including recommendations to create and try to pass entirely new bills. But, so far, he hasn’t publicly expressed any concerns about sweepstakes casinos.
State AGs, gambling regulators have targeted sweepstakes casinos
Another route some states have taken to ban sweepstakes casinos has been through cease-and-desist orders. Addressed to specific online operators, these orders have been issued by both state gambling regulatory bodies and attorneys general.
While New York’s sweepstakes casino ban awaits its governor’s signature, Attorney General Letitia James recently sent cease-and-desist orders to 26 operators.
In Louisiana, Gov. Jeff Landry recently vetoed a bill that would have banned sweepstakes casinos in that state, saying it could be better handled by the Louisiana Gaming Control Board. That board took immediate action by issuing 40 cease-and-desist orders to offshore and sweepstakes casino operators.
Attorneys general in states like Michigan, Delaware, West Virginia, and Washington have also sent out orders or subpoenas to sweepstakes casino operators, independent of any legislative efforts.
Texas Attorney General Ken Paxton has never publicly addressed sweepstakes casinos.
