Connecticut is preparing to ban online sweepstakes casinos after state lawmakers unanimously passed Senate Bill 1235. The bill now sits on the desk of Governor Ned Lamont, who can either sign it into law or let it take effect automatically after 15 days without action. If finalized, the new rules would take effect on October 1.
Good to know
- Operating an online sweepstakes casino in Connecticut may soon become a Class D felony.
- The bill includes new limits on lottery couriers and tighter rules for gambling operators.
- Online casino tax revenue in Connecticut reached $50 million last fiscal year.
Senate Bill 1235, which passed the House in a 146–0 vote and the Senate 36–0, targets online sweepstakes-style casinos that use simulated gambling features. These platforms often offer real or simulated casino games under the guise of promotional giveaways, bypassing the state’s gambling regulations.
Under the new law, offering these services would be a Class D felony, punishable by up to five years in prison and a $5,000 fine. While most sweepstakes platforms would fall under the ban, the legislation carves out an exception for grocery retailers offering discount-based non-cash prizes at chains with five or more locations.
Connecticut’s move comes amid a broader national push to crack down on unregulated gambling. Montana has already banned online sweepstakes casinos, and similar efforts are underway in New Jersey, New York, Louisiana, and Texas. These platforms, which operate in regulatory gray areas, reportedly brought in over $67 billion in revenue in 2023.
Major operators such as VGW and Stake have already pulled out of the Connecticut market ahead of the rule change, anticipating enforcement.
Bill includes wider gambling oversight reforms
The measure does more than just target sweepstakes platforms. It also tightens rules across Connecticut’s gambling ecosystem. The legislation will ban third-party lottery couriers from operating in the state, aligning with recent crackdowns in California, Florida, and proposed bans in Texas. These couriers have drawn criticism for selling lottery tickets without proper authorization.
In addition, SB 1235 introduces several regulatory changes:
- New record-keeping standards for operators.
- Confidentiality rules tied to criminal background checks.
- Tighter advertising restrictions to limit exposure to gambling promotions.
Connecticut Department of Consumer Protection Commissioner Bryan Cafferelli supported the bill, saying it would “benefit the department by improving our regulatory oversight of the gaming industry.”
Tribal casinos and tax revenue remain key
Connecticut’s regulated online casino market is operated exclusively by the Mohegan Tribe and Mashantucket Pequot Tribal Nation through partnerships with FanDuel and DraftKings. Since online gambling was legalized in 2021, the sector has generated $123.2 million in taxes.
In the most recent fiscal year, online casino revenue hit $275 million, producing nearly $50 million in tax revenue at the state’s current 18% rate. The rate is set to rise to 20% by 2026.
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