Montana has enacted a new law banning online sweepstakes casinos, becoming the first U.S. state to do so. The decision has sparked criticism from the Social and Promotional Games Association (SPGA), which argues that the legislation uses overly broad and vague definitions.
Good to know
- Senate Bill 555 classifies sweepstakes and promotional games as internet gambling.
- The SPGA warns that even free loyalty programs could face penalties.
- Microsoft Rewards was mentioned as an example of a platform potentially affected.
Under Senate Bill 555, Montana now treats online sweepstakes and promotional games as forms of internet gambling. These programs, often free-to-play and used for marketing or customer engagement, have traditionally been legally distinct from real-money casinos.
The SPGA argues that the law blurs those lines, warning that platforms with no purchase requirement could now fall under gambling laws. They raised concerns about criminal penalties applying to promotional tools widely used by businesses across the U.S.
Concerns over loyalty programs
Microsoft Rewards, a system that lets users earn points and enter sweepstakes, was highlighted by the SPGA as one platform that might unintentionally violate the law. The group sees this as part of a larger risk to long-standing marketing practices.
“This is a dangerous precedent that could undermine consumer trust, business innovation and long-standing legal marketing practices,” a spokesperson for the SPGA said.
Montana’s move contrasts with recent actions in other parts of the country. In 2025, several states rejected similar restrictions and instead pursued more focused regulations.
The SPGA is encouraging lawmakers to adopt clearer, more balanced legal frameworks. They argue that blanket bans risk limiting innovation and could harm both consumers and businesses unnecessarily.
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