The state of Montana has passed new legislation that makes online gambling a felony. However, the wording of the law is such that it can target nearly all gambling websites, including so-called “sweepstakes casinos.”
This makes Montana the first state to explicitly ban such casinos, and fans of such games worry that it will set a precedent that could spread to other states in short order.
What does the law actually say?
The law in question, SB 555, bans the transmission or reception of gambling information over the internet. While this isn’t a particularly novel statute, what sets SB 555 apart is that it explicitly includes gambling involving digital tokens.
This takes direct aim at the gold coins/sweepstakes cash model, which had flown under the radar until now.
Violations would be subject to up to 10 years in prison and up to $50,000 in fines, and any profits from such activities would be subject to forfeiture.
It should be noted that the law doesn’t target players in any way, only operators. However, if it has the intended effect, many sweepstakes casino operators are likely to pull out of the Montana market after its implementation on October 1, 2025.
What are sweepstakes casinos and why are they being targeted?
Sweepstakes casinos are sites that allow you to buy tokens or gold coins to play your favorite casino games. You can then exchange these coins or tokens for cash or other prizes.
Because you’re not explicitly gambling with cash, the sweepstakes model has successfully bypassed gambling laws in many states.
However, Montana lawmakers argued that this is fundamentally just gambling in disguise, and as such, it undermines state control over such activities.
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What this law means for you
Once the law goes into effect in October, it’s likely that many sweepstakes casinos sites will block players with Montana IP addresses.
Completely free-to-play casino games will still be available, but any site that offers some sort of compensation structure will be banned.
The law also applies to regular offshore casinos, but those have already been operating in violation of existing statutes. Increasing the penalties for operating casino games may cause a few of them to abandon the market, but it’s unlikely that all of them will pull up stakes and leave.
Critics of the law say that this move could drive more users to these offshore sites, which are often questionably regulated and carry security risks.
Beyond that, influencers who promote sweepstakes sites could face legal exposure if they market them to residents of Montana, and even some loyalty and rewards programs (like hotel or airline giveaways) could be affected by a strict interpretation of the statute.
Is SB 555 an isolated event, or the start of a trend?
While the law will clearly have a big impact on fans of sweepstakes-style games in Montana, the bigger question is whether other states will soon follow suit.
If similar statutes are passed elsewhere, the sweepstakes model could soon become a thing of the past. It could also lead to more stringent regulations on offshore casinos, but that’s not likely to have nearly as far-reaching of an impact.
The legislation could end up affecting more than it was intended to do, as a strict interpretation could impact any sort of digital promotion that offers free rewards.
It’s rare that a law passed in Montana affects every single person in America, but this could potentially be one of those times.
