Yes, sweepstakes casinos are legal and I am going to address that first, simply because there is such a high degree of ambiguity surrounding the issue as to be the primary factor driving interest from this audience. Sweepstakes casinos are legal in almost every state and have been operating within... Show more
Yes, sweepstakes casinos are legal and I am going to address that first, simply because there is such a high degree of ambiguity surrounding the issue as to be the primary factor driving interest from this audience. Sweepstakes casinos are legal in almost every state and have been operating within the boundaries of applicable laws for years.
Sweepstakes casinos are not gambling websites. They are promotional-based platforms; there is a distinction, and it is based on an entirely different legal framework. When you engage in a sweepstakes casino, you are not betting your own money. Rather, you are entering into a promotional sweepstakes contest using virtual coins. It is important to note that playing in a sweepstake casino does not require any form of monetary purchase. This is where the critical aspect comes into play regarding compliance with the law. Sweepstakes casinos utilize a unique model for online gaming: Gold Coins can be purchased for entertainment purposes; however, Sweeps Coins (the ones that can be redeemed for prizes) must always be made available at no cost.
Below is all information that a player will need to know about sweepstakes casino play: which states allow sweepstakes casino play, which states restrict or prohibit sweepstakes casino play, and why some states do one versus another. I also explain the federal laws that outline what constitutes a sweepstakes versus what defines a wagering/gambling activity. Show less
Oloruntoba Yusuf Casino & iGaming Expert 
Emmanuella Oluwafemi iGaming Content Manager Platforms I have examined that are compliant with the standards mentioned above have the following in common:
As each of these standards relates to compliance, if any standard is violated, the entire structure fails.
Alternative Method of Entry (“AMOE”) refers to a provision or component of a program which provides participants with at least one alternative means to enter and/or win. While an AMOE may be viewed as a courtesy offered to players by a platform, it is, in fact, a statutory requirement. In order for a sweepstakes to be considered lawful under U.S. laws governing lotteries and similar forms of gaming, participants must always have the opportunity to enter and potentially win without having to expend money. This requirement is what differentiates a sweepstakes from an unlawful lottery. Therefore, the availability of a legitimate AMOE is the primary compliance factor I consider when evaluating a given platform.
Platforms I have evaluated that offer a compliant AMOE make finding such an entry option relatively simple i.e., through a log-in incentive; via social media incentives; or through a direct mail option. Conversely, where I must search extensively for such an option (or, in some cases, find it hidden in a website’s footer or buried behind a technical process that will likely discourage most users), I mark it accordingly. A “real” AMOE should not only exist but also be easily accessed by eligible participants.
AMOE is the procedure, whereas “no-purchase-necessary” refers to a larger legal framework. There is an important distinction: AMOE is primarily concerned with how people are able to join without having to pay money; no-purchase-necessary concerns all aspects of participation (i.e., there cannot be a requirement for players to have paid money at any point in time, to collect Sweeps Coins, or receive a prize).
In practice, what most often causes non-compliance with this is much less blatant than merely eliminating the free way to enter. I have seen several platforms which do provide AMOE, however they allocate coins to such extent toward purchase packages that it is nearly impossible for those who don’t spend money on bundles to take part in promotional events. Such an approach (in which payment is technically not required to take part, but practically must be made in order to meaningfully participate) lies within a gray area as far as being lawful.
The reason Sweepstakes Casinos can legally operate on a national basis is because they fall into an exception within the scope of Federal Gambling Law. Federal law dictates how gambling is conducted with real money and therefore does not apply to Promotional Prize Competitions that have been structured under the No-Purchase-Necessity (NPNI) rule. It is this NPNI distinction that has allowed Sweepstakes Casinos to be able to operate on a national basis while Real-Money Online Casinos are limited to just a few licensed States.
Therefore, from an operational standpoint, Sweepstakes Casinos do not have their operations monitored by Gaming Authorities like those regulating Licensed Casinos.
When I enroll as a player on a new platform to try out the game, the one thing I look for first is if there are genuine separation of the coins – i.e., can the platform blur the line between them so that they create either legal or operational problems for the player? The two-coin structure is not something that is an optional design choice made by platforms because it makes their lives easier. On the contrary, it is what preserves the entire legal model.
Here’s how the system works:
| Coin Type | How You Get It | Real Value | Redeemable for Prizes |
| Gold Coins (GC) | Purchased or gifted free | None – entertainment only | No |
| Sweeps Coins (SC) | Credited free, or bundled with GC purchases | Yes – redeemable for cash prizes | Yes |
Gold Coins serve solely for the purpose of entertainment. Players may utilize their Gold Coins in order to engage in game activities; however, there are no legal means by which Gold Coins may be exchanged for money. The gold coins are the payment layer of the platform – i.e., that which is paid for directly by the player when he/she purchases a gold coin bundle.
Sweeps Coins are the prize layer. They must always be made available at no cost to the player (i.e., Sweeps Coins must always be given away), thus it is necessary for all legitimate platforms to give them to the player by way of free daily bonus awards, AMOE mail-in requests, or promotional drops. When Sweeps Coins are packaged together with a gold coin purchase, the purchase price is legally considered to have been for the gold coins alone – the sweeps coins are merely a promotion added on top of the gold coins, not something that was being sold.
By keeping these two different currencies as distinct from each other operationally, this is what will allow the platform to operate lawfully. If Sweeps Coins could only be acquired through a purchase, then the structure of the model would be forced into an illegal lottery. If Gold Coins were redeemable for money, then the platform would be operating as an actual gambling site. The separation is not cosmetic – it is the legal architecture. For a deeper look at how these currencies interact across different platforms, see our guide to the dual currency model.
When researching why many U.S. states currently prohibit real-money, online casino play, I found myself constantly returning to the Unlawful Internet Gambling Enforcement Act (UIGEA) – and studying this act provides an easy path to learning about how sweepstakes-based casinos work.
The UIGEA is the principal federal statute governing U.S. on-line gaming activities. Although it did not outlaw on-line gaming per se; rather, it outlawed financial institutions from processing transactions connected with “unlawful” on-line gaming. As a result of the this, real-money online casinos were forced out of business because they could no longer rely on their traditional banking relationships. Today, many cannot offer services to U.S.-based customers.
In the UIGEA, the key term is “unlawful.” It prohibits on-line gaming as defined under existing federal and state statutes. Specifically, it defines on-line gaming as a game of chance in which participants compete for cash or other prizes, where winning is determined in whole or in part by chance. Sweepstakes-based casinos differ from such models. Participants in sweepstakes-based casinos do not risk money; instead, they participate in a prize promotion utilizing virtual currencies. No purchase necessary to enter, thus, no financial consideration exists to gamble. Therefore, the UIGEA is irrelevant to sweepstakes-based casinos.
This is not a loophole. Rather, this represents a long-standing distinction within U.S. sweepstakes laws that predates the advent of online gaming.
Sweepstakes casinos work under the U.S. Federal Trade Commission (FTC) rules; though there is no federal law that prohibits them – it’s the UIGEA. The FTC governs promotional sweepstakes at the federal level, and has several requirements in place to govern promotional sweepstakes:
When reviewing a casino’s Terms of Use, I compare those with the FTC regulations above. A casino that does not provide complete official rules may not only offer a poor gaming experience but also be working outside the compliance framework that provides its regulatory protection.
In other words, although there may be no regulatory body to enforce gaming regulations with respect to sweepstakes casinos, this doesn’t mean they will go unregulated. Both the Federal Trade Commission (FTC) and State Attorneys General have authority to take enforcement action if they find that an operator is misleading its customers; if the operator is misrepresenting the odds of winning a prize; or if the platform is structured in such a way as to create ambiguity as to whether it is functioning as a sweepstakes site versus a gaming site.
If an operator is found to be operating outside of compliant boundaries, the potential risks include:
To summarize, while sweepstakes casino operators do receive some level of protection through law, this is contingent upon operators continuing to maintain those features of their business model that define them as promotional platforms (versus traditional gambling). Operators who “cut corners” regarding term disclosures, misrepresent the rules/prizes associated with participating, or fail to provide free entry opportunities to participate in promotions, may not only be poorly managed but also expose themselves to the type of enforcement actions that result in closure.
The games are almost indistinguishable from each other. They have virtually the same slot titles available at sweepstakes platforms, blackjack tables, roulette wheels etc. What many players fail to see is the vastly different structure. This difference in structure is why one is legal and the other is illegal.
It is here that much of the confusion begins. When a player visits a sweepstakes casino for the first time, they will see a product that has a similar look and feel as their favorite online casino. The casino’s game selection is very close, the interface looks polished, and when you sit down at a virtual table to play cards or spin a slot machine the experience will be largely the same. However, there is no similarity in the legal/financial construction of the two.
| Feature | Online Gambling | Sweepstakes Casinos |
| What players use | Real money wagers | Virtual coins (GC and SC) |
| Gold Coins | No | Purchased for entertainment, no real value |
| Sweeps Coins | No | Gifted free or bundled with GC purchases; redeemable for prizes |
| How winnings work | Cash tied to bet size | Only SC can be redeemed for prizes |
| Legal classification | Gambling under federal/state law | Promotional sweepstakes under US law |
| Free participation | No | Required by law |
| Player experience | High financial risk | Prize play without direct wagering |
It is important to distinguish between sweepstakes casinos and social casino apps as well. Social casino apps are run on a completely different business model than sweepstakes casinos. Players of social casino apps play with virtual chips that cannot ever be exchanged for real money or prizes; in other words, there is no reward/prize layer whatsoever. Sweepstakes casinos offer actual rewards/prizes that can be redeemed by players, this is why the legal framework around sweepstakes casinos is so much more complicated, and the overall gaming experience is so much better.
The first two items on this list are not optional – they are what I check before recommending any platform. A sweepstakes casino that gets these wrong isn’t just cheating… It is potentially running outside of the law. The federal framework sets the boundary but within those boundaries platforms have specific obligations to the players using them. And the better job they do at meeting those obligations – the more clearly responsible that platform will be.
I always look at the official Terms of Use for each Platform when evaluating them to make sure they address my concerns with regard to the allocation of Coins, the redemption of Prizes, and how Disputes are resolved. I view vagueness as a Red Flag. According to FTC regulations, operators are obligated to provide Official Rules on their Platforms which include all of the details related to Eligibility Requirements, Prize Structures, and Participation Conditions. In reality, however, I see great variability in how well the official rules (terms) of these Platforms are defined and documented, with some publishing very plain and thorough definitions of the rules that govern their respective Platforms and other hiding important information within the language such that it could require an attorney to understand.
Therefore, The Terms should clearly define:
Any Platform that does not explicitly outline these items is failing to meet their Disclosure Obligations and any Player who experiences problems after participating has very limited avenues available for resolving their issue if the terms did not establish clear expectations prior to their participation.
The largest gaps in my evaluation process are with redemption transparency. With some of the casinos I tested, I had to search for the least amount of Social Coins (SC) needed to redeem, I needed a complete prize redemption walkthrough including options for redemptions, and how long the processing time would be – none of this information was grouped together on the website where a player could find it prior to investing their time into earning Social Coins. That is no mistake of poorly designed user experience. That is a violation of legal requirements.
Legal obligations require that sites show players how to claim prizes and under what circumstances they will make prize claims. To accomplish that legally requires players to be able to find – via the site’s terms and conditions or support documentation – the minimum balance of SC required, how SC prize withdrawals work, the methods by which redemptions may be made, and the length of time for processing. Where I have been unable to identify all three of these items on a site’s publicly accessible terms or support documentation I consider that a deficiency in my review.
There is a significant distinction regarding which elements of responsibility a casino operating as a sweepstakes platform is required by law to provide versus those that would be the standard for the best sweepstakes casinos. A good start for a sweepstakes casino would include the following responsible gaming tools.
Before recommending a platform, I verify that the tools listed above are easily accessible (i.e., they’re there – not just in the footer) and that the tools function properly (e.g. if it takes a support request and 48 hours to block access to your account, this is not functioning properly).
Of all of the platforms I’ve evaluated so far, the ones that stand out for having an established internal escalation process – and not simply a generic support e-mail address – matter to many more players than you would realize once you have an urgent issue with your account. For example; if a player has had a redemption denied, an account flag placed on their account, or they have had incorrect coins allocated to their account, they will want to know as quickly as possible what options are available to them and in what order should those options be utilized.
| Check | What to Look For |
| Official rules published | Full terms accessible without creating an account, plainly written |
| Coin allocation clearly explained | How GC and SC are distributed across packages and free methods |
| Redemption terms disclosed upfront | Minimum SC threshold, available methods, and processing timeline all findable without a support request |
| Published redemption timeline and minimum SC threshold | Specific figures stated in terms, not approximate ranges or “contact us” placeholders |
| State exclusions listed | Jurisdictional restrictions named explicitly, not just “some states may be excluded” |
| Responsible gaming tools accessible | Self-exclusion, spending limits, and reality checks in account settings, not just a help article |
| Dispute resolution process defined | A named escalation path beyond a generic support email |
| KYC process explained | What verification is required, when it’s triggered, and how long it takes |
If a platform meets all eight criteria to pass this check, then it has fulfilled the minimum legal & transparency requirements for the platform. However, if the platform failed more than one or two, I would be concerned enough with how the platform works to reconsider whether or not to build up my significant SC balances on that platform.
The most commonly asked question by players is rarely whether or not sweepstakes casino are legal. Most of the time players ask if sweepstakes casinos are legal in their area. Where you live will determine legality for an online sweepstakes casino to operate; however, there is a little bit more to the story then just a yes or no. Federal law provides the national scope allowing sweepstakes casino to be played at. However, each state is responsible for providing its’ own guidelines regarding prize promotion, which can vary enough so as to have a direct impact based upon where you reside.
The majority of states allow you to play sweepstakes casinos. Below is an updated list of what’s currently available for each state; however, as I’ve experienced with testing platforms’ accessibility across the various states within the top-10, there are times that a state will have a particular platform available while another similar or identical platform (also listed) is unavailable. Verify availability with your chosen platform prior to registration.
| State | Status | State | Status |
| Alabama | Legal | Alaska | Legal |
| Arizona | Legal | Arkansas | Legal |
| California | Legal | Colorado | Legal |
| Connecticut | Legal | Delaware | Legal |
| Florida | Legal | Georgia | Legal |
| Hawaii | Legal | Illinois | Legal |
| Indiana | Legal | Iowa | Legal |
| Kansas | Legal | Kentucky | Legal |
| Louisiana | Legal | Maine | Legal |
| Maryland | Legal | Massachusetts | Legal |
| Michigan | Legal | Minnesota | Legal |
| Mississippi | Legal | Missouri | Legal |
| Montana | Legal | Nebraska | Legal |
| New Hampshire | Legal | New Jersey | Legal |
| New Mexico | Legal | New York | Legal |
| North Carolina | Legal | North Dakota | Legal |
| Ohio | Legal | Oklahoma | Legal |
| Oregon | Legal | Pennsylvania | Legal |
| Rhode Island | Legal | South Carolina | Legal |
| South Dakota | Legal | Tennessee | Legal |
| Texas | Legal | Utah | Legal |
| Vermont | Legal | Virginia | Legal |
| West Virginia | Legal | Wisconsin | Legal |
| Wyoming | Legal |
For state-specific details on platform availability, registration requirements and any local conditions that apply; please check our dedicated guides for California, Texas, Florida, and New York.
A few U.S. jurisdictions have laws that strictly forbid sweepstakes casino-style games. These jurisdictions may do this with either an anti-sweepstakes law specifically created for this type of activity or general gaming laws applicable to promotional models. In such areas, players attempting to register will likely be blocked by a geolocation block; however, as always, it is advisable to check the website’s own terms (for updates) because the legal status of this type of game can evolve rapidly and sometimes changes before they are updated on other websites.
| State | Status |
| Idaho | Not permitted |
| Michigan | Not permitted – casino play available but SC redemption blocked on some platforms |
| Nevada | Not permitted |
| Washington | Not permitted |
Last updated: May 2026. Legal status is subject to change. Check individual platform terms and conditions for the most current availability in your state.
Partial restrictions are the most common cause of confusion in players. The platform will load, the games function properly; however, upon redemptions something will fail. Typically this occurs due to a player failing to read the terms for their specific state prior to registration. Again, the platform has done nothing improper. The player simply was unaware that his/her/their state had placed conditions that would not impact how he/she/they experienced gameplay, but could/would impact how he/she/they were able to utilize accumulated Sweeps Coins.
Typically partial restrictions fit into one of the three categories listed below:
Redirection methods limits – some states limit the number of payment methods that players have access to as a resident of those states. Therefore, although the player has successfully completed KYC, he/she/they may still encounter some forms of withdrawals (paypal, bank transfer, etc.) that are unavailable to him/her/them as compared to other states.
Extensive KYC requirements – several states place additional requirements on identity verifications beyond the standard verification processes used by the platform before prizes may be redeemed. This can include providing additional documentation, lengthening the time required to verify identity, requiring a manual review process that is not performed for all states.
Game type restrictions – although the platform is open for play in a particular state, in some cases, specific types of games are limited based on the format of the game (most commonly poker variants or instant-win).
| State | Restriction Type |
| Arizona | Extensive KYC at redemption |
| Colorado | Redemption method limits |
| Louisiana | Game type restrictions on some platforms |
| Minnesota | Redemption method limits |
| South Carolina | Extensive KYC at redemption |
| Tennessee | Game type restrictions on some platforms |
The process I use to determine which online casinos will offer me compliant gaming options – as well as what players need to check prior to opening an account – involves two main parts. The legal framework identifies what compliant online casino operators are required to do. The verification process determines if each individual online casino operator is indeed doing so.
Step 1: Check That Official Rules Are Published and Accessible
Before I begin to evaluate a platform I check whether there are official rules easily available to read and clearly stated. If the official rules cannot be found as part of your initial search; they are located somewhere obscure such as in a website footer; they appear vague or ambiguous; or simply don’t exist – then I am done. The expectation is very low here. A reasonably well-operated online sweepstakes casino has no reason to hide their official rules from potential customers and those rules should be readily accessible, written in plain English and cover at least the following: eligibility criteria; coin/entry structure; prize award terms; redemption terms and procedures; and prohibited jurisdictions.
Step 2: Confirm the Free Entry Method Is Genuinely Accessible
Before I create my account, I check if I can get into the no-purchase SC entry option without really looking. When I have to dig through the T&Cs to find the “free” entry, I flag it as a Compliance issue. Technically meeting the AMOE (Allow Mail-In Option) simply means you have an entry method where you can enter via a mail-in option. Realistically, however, players need to be able to obtain their Sweeps Coins easily, with little to no barriers, and ideally without having to call Support to figure out how they can do so.
At this point what I am checking for: Are the Official Rules or FAQ describing the Free Entry Method clearly? Are there Daily Login Bonuses, Social Media Promotions or Postal Request Processes that are easy to start? If finding out the Answer requires sleuthing then it doesn’t matter if the option does exist – it’s still a Red Flag.
Step 3: Look for Clear Redemption Terms
Before you begin investing time on a platform (i.e., accumulating enough SC), I would recommend checking 1) the required amount to redeem SC; 2) the availability of different payment options (e.g. PayPal, bank account, etc); and 3) the estimated timeframe it will take to process your request for payout.
If any of these items requires creating a support request in order to find that information, that could be an indicator that there may be issues with the platform when you need to withdraw your money. It should also be noted that all of the above items represent legally mandated disclosure requirements by each state as part of their gaming laws, not simply a “courtesy” offered by the company. The companies which hide this information from users are typically the same companies that cause the most headaches at the point of withdrawal. For a comparison of how quickly different platforms process redemptions, see our SC payout speed comparison.
Step 4: Research the Redemption Track Record
I am particularly sensitive to complaints about redemptions and SC prize collection (slow payments; account freezes; denied withdrawal) in player reviews. If a casino has very good published Terms of Use but fails players when it comes time to pay them out, those failures will likely appear first in their player reviews. I do not just look at one complaint as evidence of an issue. I also do not think every platform should attract all positive player reviews. What I do think is important is identifying a pattern (not an individual anomaly) of slow redemptions; unexplained account closure; delayed/never completed Know Your Customer (“KYC”) verification process.
| Verification Step | What to Check | Red Flag |
| Official rules | Accessible without an account, plainly written | Buried in footer or missing key sections |
| Free entry method | Findable without digging, genuinely accessible | Requires a support request to locate |
| Redemption terms | Minimum SC, payout methods, and timeline all stated | Any of the three require contacting support |
| State exclusions | Your state listed clearly in eligibility terms | Generic “some states excluded” notice only |
| KYC process | What’s required, when it triggers, how long it takes | No mention of verification before redemption |
| Player reviews | Patterns in redemption complaints across multiple sources | Consistent reports of delays or denied withdrawals |
| Responsible gaming | Self-exclusion and spending limits in account settings | Only referenced in a footer link |
| Dispute resolution | A defined escalation process beyond a generic support email | No named complaints process |
These eight basic steps to evaluate an online gaming platform prior to registration will take much less time than amassing a SC (subscription credits) balance that may be unredeemable. Platforms which pass each check I make regarding them have no reservations from me as recommendations. Those failing on most or all of those same evaluations, regardless of what they may look like in terms of their games libraries, will be highlighted in my review as red flags.
Legal compliance is one of the most important factors. The difference between those platforms that I actively recommend and those platforms I only consider legal is whether they have exceeded their minimum obligations. The four areas below are where that gap shows up most clearly in my testing – and where players will be directly affected by the difference between a platform that seriously considers its obligations and one which does not treat them more than an exercise to check a box.
When I review the games and game return rates on a gaming platform’s site as well as what I consider the integrity of the game provider itself through evidence of third party Random Number Generator (RNG) certification, this is not simply a matter of verifying that all games provided by the platform are “fair.” In my opinion, a gaming platform will earn my trust when they provide access to third party RNG certifications. The difference here is obvious; “we believe our games are fair” is a statement any game provider could say. An independent lab such as GLI, BMM, eCOGRA, etc., verifies compliance with an external standard of randomness in the number generators used by each game.
In addition to whether or not a gaming platform provides third party RNG certifications, I also focus on if the platform publishes certification information where players may be able to easily locate it – i.e. at least some reference to certification information within the terms document. At best, some platforms provide direct links to their testing certifications and/or clearly display audit seals from recognized labs. When neither of these exist, I take notice – since players cannot verify their own claims of fairness made by a gaming platform without this information.
Platforms that I rate highest for quality have clearly invested into detecting and preventing fraudulent activity – such as using two-factor authentication, encrypting your login information, and monitoring your accounts proactively. I take note whether this is implemented while testing. In addition, there is a large difference among the platforms regarding this area and many players do not realize the potential threat until something happens.
A responsible platform for operating a sweepstakes casino will be able to provide at least the following:
Some platforms may also implement additional steps above the minimum requirements; however, they will include some form of proactive monitoring. This will allow players to receive notifications of any unusual activity before you are required to notify someone. Proactive monitoring becomes especially important at the time of redeeming a prize. When the player’s account has been compromised at the wrong time, it may result in a redemption being processed to an incorrect address. Regardless of how quickly support responds, recovering from this type of error can be very slow.
KYC is something I go through on every one of the platforms I evaluate. It’s the best indicator of how seriously a platform treats their obligations under the law. The length of time it takes to complete, what information you are asked for, and how good they are at explaining each step will tell you as much about the compliance side of things as anything. For a player, a well run KYC process will explain what documents are needed to be completed, set realistic expectations as far as when those documents can be processed, and communicate with the player before there is a problem if there is a hold up with the documents that were provided.
I check to see if the features above are available as part of the usual course of using the product – not simply in a Help Article. A Self-Exclusion feature placed at least 4 levels into an app’s menu structure does not qualify as a responsible gaming tool – it qualifies as a Checkbox.
There are Four Tools That I Look For On Every Platform I Review.
Of the four categories of tools above, the ones that I am confident recommending as easily discoverable via the Account Settings area of each app.
Age requirements come up more than players expect – particularly at the redemption stage, Players are often surprised about how many age requirements exist when it comes time to cash out their balances – especially during the redemption process. At this point, you have already been verified through a Know Your Customer (KYC) method, which verifies not only that you are old enough but also verify your State Residency. On multiple occasions I have seen a player who has built up a Sweepstakes Casino (SC) account become disqualified from redeeming their prize because they did not see the 21+ age limit on the sign-up page. It took them less than 30 seconds to verify what their State’s required age was prior to opening an account so they would avoid this issue altogether.
All U.S. sweepstakes casino sites set the minimum age as 18 years old. The reason for this is that most states allow people over the age of 18 to enter into promotional sweepstakes and therefore reflect the base-line law regarding entry into promotional sweepstakes in the United States. A smaller number of states set a higher minimum age; all responsible casinos will make sure to adhere to the minimum age requirements for each state, rather than the individual account requirements.
The following are states where you have to be 21 years of age or older to take part in sweepstakes casino games and claim your prize(s):
| State | Minimum Age |
| Arizona | 21+ |
| Louisiana | 21+ |
| Massachusetts | 21+ |
| Montana | 21+ |
The remaining eligible states will adhere to a minimum age of 18 for participation.
In my experience many platforms have an initial redemptions’ age verification, not the sign-up; however some require a verification prior to sign up. Review the platform’s terms prior to earning SC. The potential for your SC to become unavailable when attempting to redeem is direct: if a player signs up at 18 in a 21+ state plays for 6 mos. and then attempts their first redemption – he/she will run into a barrier that can’t be bypassed by verifying age, until he meets the age requirements. Your SC doesn’t go away, it just becomes unaccessible until age eligibility has been verified.
The verification process is similar to the KYC outlined in the Player Safety Section above. Government issued photo identification (passport, drivers license, state ID) confirms age. Many platforms requiring age verification from players prior to receiving SC will request said ID as part of the registration process prior to crediting any coins. Some may require such as part of the standard KYC process upon requesting redemption.
Additional aspects worth noting:
Sweepstakes casinos cause confusion for many players about one thing more than anything else: tax treatment. In my research on how the IRS treats prize money from sweepstakes gaming, I learned that the vast majority of players have no understanding that their prizes represent reportable income. Whether or not the player receives a 1099 does not matter as both require an individual to declare them as such. Due to the casino style presentation of sweepstakes games, a lot of players feel they should be able to use the same tax rules as with traditional gambling losses/and/or wins. Those tax rules allow players to offset their losses against their wins, and also provide differing reporting requirements (based on type of game). Unfortunately this belief will lead to much trouble when it comes time to file taxes.
The IRS defines sweepstakes prizes as other income; and therefore, other than contest winnings, awards & promotional giveaways; and not gambling winnings. This classification creates a couple of important differences to players:
As an example, the IRS will allow you to deduct losses from wins (i.e., gambling) on schedule a; however, you may not do so with sweepstakes winnings. All redemptions are gross income; and there are no deductions available for coin spent or purchases made within the platform.
Also, unlike reporting thresholds; the IRS requires all platforms to issue a 1099-MISC to players whose Prizes exceed $600.00 in a calendar year. Platforms are not required to issue a 1099-MISC for any player whose Prizes do not exceed $600.00. It is the detail that I see players miss most often is that the absence of a 1099-MISC does not mean that winnings do not need to be reported. In other words, all redeemed SC cash Prizes must be included in your tax return for the year they were received as taxable income; and any redeemed gift cards or merchandise are taxed at fair market value. Players who receive a 1099-MISC must report that figure on their tax return – Schedule 1, Line 8 (other income); and players who do not receive a 1099 but have redeemed any amount of Prizes must also report those amounts in the same place. Gold Coins have no monetary value; and therefore are tax-free at any time.
Keeping a personal record of your SC redemptions throughout the year – dates, amounts & methods – is the most reliable way to file accurately; especially if you play across multiple platforms.
| State | State Income Tax | Sweepstakes Prize Treatment |
| Alaska | None | No state tax on prizes |
| Florida | None | No state tax on prizes |
| Nevada | None | No state tax on prizes |
| New Hampshire | None | No state tax on prizes |
| South Dakota | None | No state tax on prizes |
| Tennessee | None | No state tax on prizes |
| Texas | None | No state tax on prizes |
| Washington | None | No state tax on prizes |
| Wyoming | None | No state tax on prizes |
| California | Up to 13.3% | Taxable as ordinary income |
| New York | Up to 10.9% | Taxable as ordinary income |
| New Jersey | Up to 10.75% | Taxable as ordinary income |
| Oregon | Up to 9.9% | Taxable as ordinary income |
| Minnesota | Up to 9.85% | Taxable as ordinary income |
| Illinois | 4.95% flat | Taxable as ordinary income |
| Colorado | 4.4% flat | Taxable as ordinary income |
| Arizona | 2.5% flat | Taxable as ordinary income |
| Pennsylvania | 3.07% flat | Taxable as ordinary income |
State tax rates often fluctuate over time. Therefore, while the table reflects common state tax brackets, it does not reflect the specific tax bracket that will apply to an individual. Players from high state income tax states with larger-than-average SC balance redemptions may need to account for state taxes as part of their total picture of taxes (not just federal) and in some cases may want to set aside a portion of each redemption throughout the year due to the potential of having a very high combined federal/state tax rate on winnings.
I would handle sweepstakes redemptions in exactly the same manner I would handle all prize income, i.e., tracking them throughout the year and reporting accordingly. Although casinos are often not considered “gambling” establishments, the IRS will recognize the value of the money being redeemed. Therefore, the consequence of failing to report sweepstakes income will be identical to that experienced by anyone else who fails to report income.
Penalty and interest; The failure-to-file-penalty charged by the IRS is 0.5 percent of the unpaid tax due per month (to a maximum of 25%), while interest accrues at the federal short-term rate plus 3% above this. With regard to a substantial redemption, these penalties accumulate much quicker than many players realize.
Risk of audit; Because platforms issue a 1099-MISC and the reported income does not match what was claimed on a player’s tax return, there will be a reported discrepancy which will trigger an audit notice from the IRS based on automated matching. Those players receiving a 1099 and do not claim the related income are not operating “under the radar,” but rather have created an easily identified discrepancy for the IRS to detect.
Exposure over time; When a player redeems at various platforms during a single tax year and tracks none of the redemption awards received, he may inadvertently end up with a higher total unclaimed award than realized. In fact, $200-300 from three or four different platforms will likely exceed the average person’s expectation when it comes to their aggregate redemption income. Furthermore, because no 1099 has been issued for any of those redemptions, his obligation to file remains unchanged.
A simple approach is to maintain a log of all redemption awards obtained via sweepstakes throughout the year – Platform Name, Date, Amount & Method. This log will allow you to properly report your earnings at tax filing time and provide proof should there be any disputes regarding your claims. If you plan on redeeming large amounts of cash via sweepstakes during the year, you should consult a tax professional who deals with prize income, regardless of how much you pay for the consultation.
Based on the legal framework, testing each platform’s accessibility, and studying their tax implications I would like to provide players with all information necessary prior to signing up for a sweepstakes casino:
DISCLAIMER
This page is for informational purposes only. It is not a substitute for legal or financial advice. The sweepstakes casinos availability as well as their bonus terms and redemption options can change over time and vary from state to state. Check Terms and Conditions of each individual platform prior to registering.
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