Four States Including Iowa, Oklahoma Officially Ban Sweepstakes Casinos

Earlier this month, we reported that four states were on the verge of passing sweepstakes casino bans. All four measures became law, but not before a little bit of upheaval in one state. 

Six states have banned sweepstakes casinos in 2026, bringing the total to 13. Minnesota was on its way to enacting a ban, but its attempt stalled.

Oklahoma Ban Passes After Legislature Overturns Governor’s Veto

The Oklahoma legislature was unstoppable in its crusade to pass SB 1589. Gov. Kevin Stitt vetoed the bill on May 7th and expressed legitimate concerns about it. He felt that the bill overreached in power, particularly with language that extends criminal liability to service providers and affiliates. 

On May 14th, the legislature overturned the veto with a 34-10 vote in the Senate and a 68-19 vote in the House. With the measure’s passing, operators will have until November 1st to cease operations or face criminal penalties. These penalties also extend to any employee or company associated with the casino, including affiliates and payment processors.

Louisiana Passes TWO Bills Related to Sweepstakes Casinos

Most of the attention on Louisiana’s ban on sweepstakes casinos focused on HB 53. However, a second bill, HB 883, also made its way through the legislature and landed on Gov. Jeff Landry’s desk. Despite vetoing similar legislation last year, he signed both bills into law.

HB 53, now Act 48, added sweepstakes casinos to the list of organizations that state prosecutors can target under racketeering laws. HB 883, now Act 182, officially closes the door on sweepstakes casinos in the state by banning any site that uses a dual-currency system and simulates any form of gambling.

As with Oklahoma, Act 182 extends to anyone connected to a sweepstakes casino facing prosecution. Furthermore, every wager at a casino could constitute a violation of the law and carry penalties, including up to 5 years in prison and fines up to $40,000. 

Both measures take effect on August 1, 2026, giving operators just over two months to comply.

Iowa Regulators Can Now Prosecute Sweepstakes Casino

Iowa Gov. Kim Reynolds signed SF 2289 into law on May 15, giving the Iowa Racing and Gaming Commission enforcement powers against sweepstakes casinos. While this bill is not a direct ban, some consider it the same since lawmakers can now issue cease-and-desist orders and take court action against operators.

The bill extends beyond sweepstakes casinos and includes any gambling vertical that must be licensed to operate in Iowa. Any operator who chooses to remain in the state after July 1, 2026, could face enforcement action. 

While not a direct ban, some operators already block access to Iowa, and others will likely follow suit, as we have seen with Kentucky. Kentucky does not explicitly ban sweepstakes casinos, but it has aggressively pursued legal action against them. Operators can expect the same from Iowa in the future and will likely become proactive to avoid such litigation.

Tennessee Officially Bans Sweepstakes Casinos

Gov. Bill Lee finally signed HB 1885 (SB 2136) into law on Friday, officially banning sweepstakes casinos in the state. This move was virtually guaranteed after passage late last month, prompting multiple operators to proactively leave the state.

The measure officially bans sweepstakes casinos and, unlike in other states, the ban is immediate, with no wind-down. Lawmakers amended the bill's language to give regulators the power to investigate and prosecute violators. Civil penalties for violators can reach up to $15,000 per violation.

Minnesota Sweepstakes Casino Bill Stalls

Minnesota’s attempt to ban sweepstakes casinos stalled as the 2026 legislative session came to a close. SF 4474 passed the Senate on April 30 and moved to the House Public Safety Finance and Policy Committee on May 5th. Since then, lawmakers have not acted on the measure. 

Since this was the end of the biennial session, lawmakers must resubmit the bill next year. The focus on SF 4760, an omnibus public safety measure that includes restrictions on prediction markets, may have contributed to the bill's stall. We will likely see a similar measure introduced in 2027, particularly with the success of similar measures this year.

Expect Several States to Pursue Bans in 2027

If you’re in a state where sweepstakes casinos are still accessible, pay careful attention to local laws. It is likely that several states will pursue legislation to ban dual-currency sites in 2027.

Some states likely to pursue action include the aforementioned Minnesota, along with Virginia, Maryland, Hawaii, Florida, Massachusetts, and Illinois. Don’t be surprised if operators start blocking these states next year.

As always, we will keep you up to date with the latest news and regulatory changes in the sweepstakes casino market.