Pair of Maryland Bills Target Sweepstakes Casinos and Illegal Online Gambling

Lawmakers prefiled the measures, titled “Gaming — Prohibition on Interactive Games and Revenue From Illegal Markets,” for the 2026 legislative session, which begins Jan. 14. They were introduced at the request of the Maryland Lottery and Gaming Control Agency.

SB112 is assigned to the Senate Budget and Taxation Committee. Meanwhile, HB295 is before the House Ways and Means Committee.

The House proposal is a carryover of a 2025 bill, HB1140, which failed to advance past the committee stage. Last year’s Senate bill, SB 860, passed in the chamber but stalled in the House.

Bills Directly Target Sweepstakes Casinos

The bills create a new criminal prohibition on “interactive games,” which it defines as any online or mobile game that:

“utilizes multiple currency systems of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents” and “simulates casino-style gaming… lottery games… or sports wagering.”

That definition precisely matches the operating model used by sweepstakes casinos, which sell virtual currency and award a second, redeemable currency (often referred to as “sweep coins”) that users can exchange for cash or prizes.

The bills explicitly exclude only games that:

“solely award noncash prizes.”

That carve-out would not protect sweepstakes casinos, which allow players to redeem their winnings for money.

Under the proposals, any person who “operate[s], conduct[s], or promote[s] an interactive game in the State” is committing a criminal offense.

Violators would face:

“imprisonment not exceeding 3 years or a fine not less than $10,000 and not exceeding $100,000 or both.”

Bills Target The Entire Ecosystem

The measures target not only the platforms, but also the financial and commercial ecosystem that supports sweepstakes casinos.

Licensed Maryland operators must disclose any business relationships with:

“a financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate that is known to support, operate, conduct, or promote an interactive game in the State.”

That language aims to force regulated casinos, sportsbooks, and suppliers to sever ties with sweepstakes operators. If they don’t, they risk losing their own Maryland licenses.

Every Maryland gaming license applicant and licensee must now disclose whether they — or any affiliate — have:

“directly or indirectly accepted revenue from the conduct of an interactive game in an illegal interactive gaming market.”

If a licensee fails to disclose those relationships, the Maryland Lottery and Gaming Control Commission can:

“deny the person’s license application or revoke a license held by the person.”

This effectively empowers Maryland’s regulators to target any company that provides payments, games, marketing, or technology to sweepstakes casinos. That includes even if the activity happened outside of Maryland.

States Moving to Ban Sweepstakes Casinos in 2026

Maryland marks the latest state to take action against sweepstakes casinos in 2026, continuing a trend that began in 2025.

• Indiana’s House Bill 1052 has already received a hearing in the House Public Policy Committee. Lawmakers were split over whether the right step is to regulate or ban the platforms. Meanwhile, the Indiana Gaming Commission has stated that the current law does not clearly grant it the authority to take enforcement actions against sweepstakes casinos.
• In Maine, lawmakers will hold the first hearing on LD 2007 on Jan. 14. As the state prepares to legalize online casinos, lawmakers may consider banning sweepstakes casinos, which would directly compete with the forthcoming regulated market.
• Virginia’s HB 161, which aims to legalize online casinos, includes a provision that explicitly prohibits sweepstakes gaming.
• Florida lawmakers have introduced a series of bills aimed at illegal gambling, a key focus for regulators and the state’s Attorney General. Some provisions could grant law enforcement agencies greater authority to target sweepstakes casinos.
• According to the Iowa Capital Dispatch, lawmakers have prefiled a bill that would expand the authority of the Iowa Racing and Gaming Commission to issue cease-and-desist orders against operators of illegal online gambling, including sweepstakes casinos.

What’s Next

The Maryland legislative session begins on Jan. 14. The first stop for the companion bills is their respective committees, which must schedule a hearing. Although efforts in 2025 fell short, given the momentum from 2025 and this year, the bills could see more action and possibly become law.