Montana Sweepstakes Casinos Banned After Governor Signs Bill

Montana’s Governor, Greg Gianforte, has made a significant mark in the U.S. gambling landscape by signing a groundbreaking bill that officially prohibits sweepstakes casinos. This bold move makes Montana the first state to outlaw these popular platforms.

Understanding Senate Bill 555

Senate Bill 555 targets the controversial sweepstakes model by specifically banning dual-currency gambling systems. Many online casinos leverage this model, allowing users to participate in casino games using virtual currency or digital tokens, thereby circumventing traditional state gambling regulations.

The bill states: “The term internet gambling includes online casinos, by whatever name known, which constitute internet gambling and are prohibited. This includes, but is not limited to, any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”

Introduced in late March, the bill swiftly progressed through the legislative process. It was initially assigned to the Business, Labor, and Economic Affairs Committee, where it gained approval before being passed by the Senate in April. Following similar progress in the House, the bill was finalized into law in under two months.

Violations of this law are severe, classified as felonies with penalties that can include fines up to $50,000 and imprisonment for a duration of up to 10 years.

Opposition from the SPGA

The Social and Promotional Games Association (SPGA), a lobby group representing social and sweepstakes casino operators, has publicly condemned Senate Bill 555. A spokesperson stated, “The SPGA strongly condemns the enactment of Senate Bill 555, which makes Montana the first state to ban online sweepstakes-style games, without even using the term ‘sweepstakes.’

“This vague and sweeping law reclassifies legitimate, free-to-play promotional games as ‘internet gambling,’ ignoring the clear legal and operational distinctions between sweepstakes platforms and real-money online casinos. Under SB 555, even platforms with no purchase required and robust consumer safeguards could now face criminal penalties.”

While the bill does not explicitly mention sweepstakes casinos, lawmakers have centered their focus on operators utilizing dual-currency models. The SPGA highlights that such promotional practices are integral to many businesses across various sectors, including major brands like Starbucks and McDonald’s. For instance, McDonald’s Monopoly promotion allows customers to win prizes through product purchases.

Challenges in Regulation

The pervasive use of models similar to sweepstakes has made regulatory efforts challenging for lawmakers. Recent attempts to introduce similar legislation have failed in states like Arkansas, Florida, Mississippi, and Maryland.

Although Montana has become a leader in addressing the sweepstakes issue, neighboring states like Washington and Idaho have already outlawed all forms of online casinos, including sweepstakes.

In Washington, for example, the sweepstakes operator High 5 Games faced legal repercussions, culminating in a $25 million settlement after a lawsuit from a resident. Active bills resembling Montana’s legislation are also pending in states such as New York, New Jersey, Connecticut, and Louisiana, all targeting casinos that employ dual-currency systems.

The Current State of Gambling in Montana

At present, online casinos are not legalized in Montana, and sports betting is restricted to the state-operated Sports Bet Montana platform. The state’s gambling landscape is primarily governed by tribal-run casinos, with video gaming terminals widely accessed at licensed venues. Montana boasts around 1,400 licensed gambling operators, totaling over 16,000 video gambling machines throughout the state.

Due to stringent online gambling regulations, residents have turned to alternative operators like sweepstakes. However, with the new law set to take effect in October, these gamblers will increasingly need to explore other avenues for their gaming activities.

Adam Roarty is a seasoned writer with extensive experience in the gambling industry. Over the past five years, he has contributed content as a writer and editor to notable platforms such as Oddschecker, CoinTelegraph, and Gambling Industry News, showcasing his expertise in sports betting and online gambling.