Montana Bans Sweepstakes Gambling

While we didn’t specifically see a bet on Kalshi regarding which of the dozen or so states would be the first to outlaw sweepstakes casinos, we are going to bet that not many had the Big Sky Country. 

And while many may shrug and wonder if anyone will even notice when a state with a population far less than any of the five boroughs finally puts its foot down, the fact remains that not only did Montana become the first state to explicitly outlaw sweepstakes casinos, but it also pioneered a rather novel approach.

What started as Senate Bill 555, never actually names sweepstakes casinos; instead, the law targets “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.”

And it certainly has some teeth. Each count is a felony, carrying fines of up to $50,000 and potential prison sentences of up to 10 years, which is not the misdemeanor rap on the knuckle and $1,000 fine proposed by some states. 

Governor Greg Gianforte signed the bill ahead of the long Memorial Day weekend, and it will take effect in just four short months on October 1st. Not wanting to be open to any liability, several high-profile sweep operators have already exited the state, such as VGW, owner of Chumba Casino and Lucky Land Slots, which began pulling up stakes in April. 

Other operators are expected to follow suit over the summer, likely erring on the side of caution given the severity of penalties involved. With a firm October 1 deadline and the possibility of felony charges, Montana’s message is clear: sweepstakes models operating in legal grey areas are no longer welcome.

There was the obligatory pushback from the Sweeps advocacy group, the Social and Promotional Games Association, which attempted to present the bill as overly vague and potentially banning activities such as McDonald's Monopoly Go game or earning and redeeming credit card points. However, this might be a bit of a stretch.

While bidding Happy Trails to the online sweeps operators may seem altruistic on the part of the legislature, it may also have something to do with the more than 16,000 video lottery terminals operated by more than 1,400 small businesses, who we are guessing are politically plugged in and willing to have their thoughts on the subject heard.

Both the state, which collects about 80 million a year in revenue from gambling, and the many bars, taverns, and even laundromats that count on their “machine money” to make it through cold and desolate winters will probably sleep a little better knowing that the unlicensed and, more importantly, untaxed competition that was available in everyone’s back pocket will soon be ridden out of town on a rail.