Montana Labels Online Sweepstakes as Gambling
The Essentials at a Glance
Montana has become the first U.S. state to pass a law banning online sweepstakes casinos. The Social and Promotional Games Association (SPGA) strongly criticizes the regulation. The reason: the definitions in the law are vague and could have far-reaching consequences for harmless promotional campaigns and loyalty programs. Even platforms like Microsoft Rewards could be affected.
What Exactly Does the New Law Regulate?
The law, titled Senate Bill 555, classifies online sweepstakes and promotional games as internet gambling. As a result, they are subject to the same legal regulations as real-money casinos. This also affects programs that do not require payment – such as sweepstakes for customer retention or loyalty point systems.
Why Is This Problematic?
The SPGA warns that this new classification could have serious consequences for businesses. Many use free promotional games or loyalty programs to retain customers or attract new users. If these are now considered gambling, companies could face legal consequences – even if no money is involved.
An example: Microsoft Rewards. Users collect points for activities such as using the Bing search engine and can redeem them for prizes or sweepstakes entries. According to the SPGA, this model could now also fall under gambling legislation.
Industry Reactions
The SPGA sees the law as a dangerous precedent. A spokesperson stated that it jeopardizes consumer trust, corporate innovation, and proven marketing strategies. The organization is calling for clearer and more differentiated legal regulations instead of blanket bans.
What About Other States?
While Montana is taking a restrictive approach, other U.S. states are pursuing a more nuanced strategy. In 2025, several states rejected similar legislative initiatives and instead developed targeted regulations. The SPGA urges lawmakers to follow this example and create legal frameworks that support both consumer protection and innovation.
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Our Assessment
Montana’s approach shows how quickly legal changes can have far-reaching effects – even on seemingly harmless marketing tools. For online casino operators, as well as companies with loyalty programs, it is crucial to carefully review the applicable legal situation. Blanket regulations like those in Montana create uncertainty and hinder innovation. Clear, differentiated laws are needed to protect consumers while allowing companies to operate with legal certainty. This development remains dynamic – we’ll keep you informed.
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