Florida Lawmakers Double Down on Sweepstakes Casinos, But Operators Aren’t Folding
Bills Define Internet-Based Sweepstakes as Illegal Gambling Under Florida Law
Double Whammy in FL
Last week, Florida lawmakers introduced two new bills to ban sweepstakes casinos in a big shakeup that could redefine a sector of the online casino industry.
On February 24, 2023, Representative Walter Barnaby filed House Bill 953. Two days later, on February 26, Senator Corey Simon filed Senate Bill 1404. The bills aim to keep the Seminole Tribe’s 30-year gaming compact intact.
This follows a national trend as states like Mississippi and Connecticut are considering going all-in on stricter gaming regulations.
The Other Side
However, this Monday, the Social and Promotional Games Association (SPGA), which represents sweepstakes operators across the country, warned of the potential economic fallout, including job loss and investment in these areas, especially for small businesses given the marketing potential of these platforms.
The SPGA recently pointed out a favorable court ruling in Knapp v. VGW Holdings Limited in Florida, which has become a flashpoint in the online gambling regulations debate for sweepstakes gaming.
NEW: Two Florida lawmakers have pre-filed bills to extend FL’s statutory prohibition against gambling to include both “Internet gambling” and “Internet sports wagering.” Another sweepstakes casino ban (maybe more). Punishable as a third-degree felony. pic.twitter.com/raiVPFznd6
— Daniel Wallach (@WALLACHLEGAL) February 27, 2025
Florida’s Full House
House Bill 953, filed by Representative Walter Barnaby, proposes a full ban on sweepstakes casinos and unauthorized online gaming. The bill defines internet-based sweepstakes as illegal gambling under Florida law.
HB 953 also increases enforcement powers for the Florida Gaming Control Commission to shut down unlicensed operators. It also proposes penalties of up to $50,000 per violation with repeat offenders facing felony charges.
Upper Chamber Echo
Meanwhile, Senate Bill 1404, filed by Senator Corey Simon, is similar to HB 953 but has consumer protection and responsible gaming provisions. The bill allocates $15 million annually to problem gambling prevention programs and requires age verification and anti-money laundering (AML) protocols for any legal gambling operators.
SB 1404 also creates a broad regulatory framework for digital gaming so any future online betting will be under the Seminole Tribe’s jurisdiction.
Since May 2021, the compact has given the Seminoles monopoly on in-person and mobile sports betting and at least $500 million a year into Florida’s coffers. With $2.5 billion in revenue projected over 5 years, lawmakers say the new bills will protect Florida’s golden egg from outside competition.
Legal Showdown
Beyond legislative efforts, the legal system is also front and center in Florida’s sweepstakes casino battle.
At issue is VGW’s two-coin freemium model which plaintiffs say violates Florida’s three-part test for illegal lotteries (consideration, chance, and prize). VGW argues no real money is wagered as players buy gold coins for entertainment and receive sweep coins as a bonus.
“In Florida, the recent decision to dismiss the case of Knapp vs. VGW Holdings is the latest in a string of positive legal outcomes for social sweeps operators. Civil action suits against social sweepstakes are largely baseless, designed only to generate headlines by making outlandish claims; they simply don’t stand up to scrutiny.
“We’re pleased that the courts are aligned with the millions of American adults who enjoy the safe, legal, and engaging games offered by social sweeps sites,” said the SPGA when asked for comment by this casino news site a couple of weeks ago.
Native American Law atty James Meggesto and #Gaming atty Samir Patel were featured in an @iGamingBusiness article recapping their webinar on sweepstakes #casinos with Indian Gaming Association. 🎙️ During the program, they discussed Florida’s Knapp v. VGW Holdings case on the… pic.twitter.com/b3jaL0Xl4x
— Holland & Knight (@Holland_Knight) January 30, 2025
Industry Pushback from the SPGA
However, after the Florida bills were introduced last week, the SPGA went into more detail on the harm a ban would create.
“This legislative overreach would criminalize legitimate business activities that entertain millions of Florida adults who enjoy social gaming experiences. The bills risk depriving Florida of tens of millions of dollars in revenue at a time when the state’s budget deficit is projected to grow to $7 billion in the next three years.
“These misguided proposals threaten significant unintended consequences that could make criminals out of major companies that regularly use sweepstakes promotions, such as Coinbase and Starbucks, not to mention the thousands of small businesses that rely on sweepstakes and similar marketing tools to survive and thrive,” the organization added in a statement this Monday.
The SPGA says sweepstakes casinos operate legally under federal law and are a consumer-friendly alternative to cash casinos where people play blackjack for money.
A National Crackdown With a Hawaiian Wild Card
Florida’s move mirrors a broader national sentiment to fold ‘em when it comes to sweepstakes gambling:
Mississippi (SB 2510): Recently passed a vote in the Senate, criminalizing internet sweepstakes casinos with penalties of up to $100,000 in fines and 10 years in prison.
Connecticut (SB 1235): Aims to ban online sweepstakes casinos, along with lottery ticket resales.
However, Hawaii is going the other way. SB 1507 proposes state-run sweepstakes gaming, allowing it to operate nationwide as a regulated alternative to online casinos.
With Florida joining the mix and other states cracking down, the sweepstakes casino industry is at a crossroads. Whether it’s a winning hand for regulation or a bad beat for operators, one thing is for sure: the stakes have never been higher.
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