Connecticut legislature passes bill to ban online sweepstakes casinos with a 146–0 vote

Connecticut is poised to outlaw online sweepstakes casinos, following unanimous approval of Senate Bill 1235 by both chambers of the state legislature. The bill passed the House of Representatives on Tuesday with a 146–0 vote, just days after clearing the Senate 36–0.

It now awaits the signature of Governor Ned Lamont, who can either sign it into law immediately or allow it to take effect automatically after 15 days if left unsigned and not vetoed. If enacted, the ban will come into force on October 1.

The proposed law targets any sweepstakes or promotional drawings that use simulated gambling devices or facilitate real or simulated online casino gaming or sports betting. It makes operating such platforms a Class D felony, punishable by up to five years in prison and a $5,000 fine.

The bill has been bundled with a set of broader changes to Connecticut’s gambling framework, including stricter oversight of lottery couriers and new transparency rules for operators. While the focus of the bill is to curb unregulated gambling, a carve-out was included for sweepstakes tied to grocery retail chains.

Promotions will be allowed if the prizes are non-cash and only serve as discounts on grocery purchases at retailers with five or more locations. The legislation arrives amid a growing trend across U.S. states to clamp down on unregulated sweepstakes casinos.

Connecticut follows Montana in enacting a ban, while similar bills are progressing in Louisiana, New York, and New Jersey. These online casinos, which operate in legal gray zones, reportedly generated over $67 billion in revenue in 2023. Several major sweepstakes platforms, including VGW and Stake, have already withdrawn from Connecticut in anticipation of the regulatory shift.

The Connecticut Department of Consumer Protection (DCP) has backed the bill. DCP Commissioner Bryan Cafferelli said the measure would “benefit the department by improving our regulatory oversight of the gaming industry.”

Connecticut’s regulated online casino market, currently limited to platforms operated by the Mohegan Tribe and the Mashantucket Pequot Tribal Nation in partnership with FanDuel and DraftKings, has seen rising tax revenues since legalization in 2021.

Online casino revenue reached $275 million in fiscal year 2023–2024, generating nearly $50 million in tax revenue at the current 18% rate. This tax is scheduled to increase to 20% starting in 2026. In total, Connecticut has collected $123.2 million in taxes from the online casino sector since its legalization.

In addition to the ban on sweepstakes casinos, SB 1235 includes a prohibition on third-party lottery couriers operating within the state. Similar restrictions have already been implemented in Florida and California, with Texas also moving toward a ban following recent controversies involving unauthorized lottery services.

The bill introduces several administrative and compliance reforms aimed at tightening control over the state’s gambling ecosystem. These include confidentiality provisions for criminal background checks, enhanced requirements for record-keeping, and new advertising limitations for gaming operators.