A fresh wave of regulatory attention is targeting sweepstakes-style casino platforms, following a sharp move by Pulsz to pull its social and sweepstakes operations from several U.S. states. With mounting debate at the state level, gambling regulators are zeroing in on services similar to Pulsz–those that straddle the blurred lines between recreation and real wagering.

In June, Pulsz announced its exit from Connecticut, Louisiana, and Maryland, removing access to Gold Coins (social play) and Sweeps Coins (redeemable prizes) in each of these jurisdictions. The move came on the heels of emerging laws: Connecticut passed a sweepstakes ban bill, Louisiana is considering one with bipartisan support, and Maryland’s gaming regulators issued cease-and-desist orders earlier in the year.

These developments echo similar legislative momentum in other states. Montana’s sweeping SB 555 took effect on May 12, imposing fines and jail time for sweepstakes operations, and New York passed its prohibition, successfully advancing Senate Bill 5935 to the Assembly and now awaiting Governor Hochul’s signature.

Legal analysts warn these efforts are not isolated incidents. As of May, twelve states have introduced bills to either regulate or ban sweepstakes platforms outright. New Jersey’s A 5447 has passed both chambers and is awaiting the Governor’s approval. At the same time, Ohio’s HB 298 proposes to legalize real-money iGaming but includes language that could prohibit dual-currency sweepstakes services. Other state efforts, including those in Connecticut (SB 1235), Louisiana (SB 181), and New York (SB 5935), continue advancing through committees.

The driving force behind this legislative push? Lawmakers and regulators are keen to close what they see as a loophole. While these platforms operate without real-money wagering, the dual-currency systems–where virtual coins can be exchanged for gift cards or cash equivalents–are viewed as circumventing traditional gambling safeguards. As New York Senate sponsor Joseph Addabbo Jr. put it, these platforms “evade consumer protection, responsible gaming and anti-money laundering requirements.”

Industry defenders argue that these services are clearly non-gambling under existing sweepstakes and promotional laws. Still, the rapid exit of Pulsz and others from multiple markets suggests operators fear that pending or future bans could threaten their entire business model.

Meanwhile, major social casino companies like VGW have pre-emptively withdrawn from states like Delaware, New York, and Montana–even those without explicit legislation in effect–citing growing regulatory pressure.

The implications are significant. For players, access to free-to-play casino games with prize potential may soon be curtailed by stringent regulations. For operators, the second half of 2025 has the potential to reshape the landscape for social and sweepstakes gaming, forcing companies to adapt or flee states at the first sign of legislative heat.

As lawmakers increase scrutiny, the line between fun and gaming is becoming increasingly thin, making 2025 a pivotal year for the future of platforms like Pulsz.