VGW, sweepstakes casinos face mounting U.S. crackdown as states tighten regulations

Sweepstakes casino operators, led by Australia-based VGW Holdings, are facing an unprecedented wave of enforcement and legislative pressure across the United States, as lawmakers and regulators intensify scrutiny of the dual-currency gaming model that allows users to redeem virtual winnings for cash.

In a sweeping effort that marks a turning point for the industry, states including Louisiana, Mississippi, New York, and Montana have moved to restrict or ban the operation of online sweepstakes casinos, which mimic traditional gambling platforms but often operate in legal gray areas.

The Louisiana Gaming Control Board last week issued 40 cease-and-desist orders, including one directly to VGW, which operates Chumba Casino, LuckyLand Slots, and Global Poker. Although Louisiana Governor Jeff Landry vetoed a bill that would have banned sweepstakes casinos outright, regulators signaled a firm stance.

Enforcement actions, they said, are a “show of strength”, and illegal operators will not be tolerated.

Mississippi followed with 10 orders, naming VGW’s Chumba Casino among the targets.

In New York, lawmakers advanced a bill banning sweepstakes casinos that use virtual currencies convertible to cash. The measure imposes penalties not only on operators but also on payment processors, software providers, and investors involved in such platforms.

In response, VGW announced plans to exit the New York market, joining other operators such as High 5 Casino and Funzpoints in retreating from the state.

Elsewhere, Montana enacted new legislation set to take effect in October 2025, establishing penalties of up to 10 years in prison and $50,000 in fines for violators. VGW has already withdrawn from Montana, as well as Delaware, Nevada, and Connecticut, amid growing legal uncertainty.

Industry responses have been mixed. The Social and Promotional Games Association, which does not represent VGW, welcomed the Louisiana veto, calling it a win for innovation and legal clarity.

In contrast, the Social Gaming Leadership Alliance, which includes VGW, urged lawmakers to adopt a sensible licensing framework.

The growing number of restrictions comes as the industry enters a critical phase. Analysts and legal experts describe 2025 as an important year for sweepstakes casinos, with operators forced to navigate a shrinking and increasingly complex regulatory landscape.

VGW, once among the most prominent names in the space, has begun a strategic retreat from multiple U.S. markets as enforcement escalates.