The Indiana Senate voted 37-8 on Feb. 18 to approve House Bill 1052, advancing legislation that would effectively prohibit sweepstakes casinos in the state. If signed by Mike Braun, the measure would take effect July 1, 2026, positioning Indiana to become the seventh state to outlaw such platforms.

The bill represents one of the most direct challenges yet to the sweepstakes casino model, which operates in a regulatory gray area in many states by using dual- or multicurrency systems. These systems typically allow users to purchase virtual currency for entertainment purposes while receiving a secondary currency that can be redeemed for cash prizes.

Scope and Provisions of HB 1052

First introduced in December 2025 by state Rep. Ethan Manning, HB 1052 was broadened during committee review to more comprehensively address digital gaming models that convert real-money purchases into opportunities to win cash or prizes. Lawmakers said the expanded language was intended to prevent operators from circumventing restrictions through alternative virtual currency structures.

Under the current version, regulators would have authority to impose civil penalties of up to $100,000 per violation. The legislation specifically targets online games and promotional systems that rely on dual- or multicurrency payment mechanisms tied to cash redemption.

Before final passage in the Senate, lawmakers adopted amendments carving out exemptions for the state lottery and peer-to-peer, skill-based poker platforms. Those changes narrowed the bill’s scope and were seen as an effort to distinguish between sweepstakes-style gaming and other regulated or skill-based activities.

The measure previously cleared the Indiana House 86-12 on Feb. 4. Because the Senate amended the bill, it must return to the House for concurrence. With the legislative session scheduled to adjourn Feb. 27, lawmakers face a narrow window to finalize the legislation. Failure to secure House approval of the Senate’s changes before adjournment would cause the bill to expire, requiring supporters to restart the process in a future session.

The proposal has drawn organized opposition from the Social Gaming Leadership Alliance, an industry trade group representing sweepstakes operators. During committee testimony, Managing Director Sean Ostrow argued that regulation — rather than prohibition — would better protect consumers and preserve legitimate businesses.

Ostrow noted that sweepstakes-based gaming has operated legally in Indiana since 2012 and warned that a blanket ban could drive compliant operators out of the state while doing little to deter unlicensed or offshore actors. Industry advocates contend that clearer licensing standards and oversight mechanisms would be more effective than an outright prohibition.

Supporters of HB 1052, however, frame the measure as necessary to close loopholes in Indiana’s gambling laws. By tightening the definition of illegal gambling to include certain virtual currency exchanges, lawmakers aim to clarify enforcement authority and reduce ambiguity surrounding online gaming models.

We should regulate this industry, not ban it outright — a total prohibition risks criminalizing legitimate businesses without stopping bad actors.

Part of a Broader National Shift

Indiana’s action mirrors similar efforts elsewhere. In Tennessee, state Rep. Scott Cepicky introduced HB 1885 in January to classify sweepstakes-style gaming as illegal gambling. The proposal followed enforcement actions by Jonathan Skrmeti, who in December 2025 issued cease-and-desist notices to 40 operators, including Stake, McLuck and Chumba Casino.

Together, the initiatives in Indiana and Tennessee signal heightened scrutiny of online gaming platforms that convert virtual currencies into cash-equivalent prizes. As more states examine the legal distinctions between promotional sweepstakes and regulated gambling, operators face an increasingly fragmented regulatory landscape.

For Indiana lawmakers, the coming days will determine whether HB 1052 becomes law or stalls at the session’s close — a decision that could reshape the state’s online gaming market and contribute to the broader national debate over the future of sweepstakes casinos.