Sweeps Operators Comply With Cease-and-Desist Orders as States Turn to Lawsuits

Sweepstakes casinos have responded to state cease-and-desist orders by leaving or restricting play, not by suing regulators. As Kentucky and Florida file lawsuits instead of sending letters, operators are being pulled into court as defendants.

The pattern stands out because other gambling-adjacent industries have gone to court over similar orders. Polymarket US sued Ohio on October 16 over a cease-and-desist letter. Sweepstakes operators have not publicly taken that route, and their trade group has not explained why.

What the record shows on court challenges

Back in October 2025, no cease-and-desist order sent to a sweepstakes operator had been challenged in court. Attorney Daniel Wallach, a critic of the sweepstakes model, said at the time that more than 100 such orders had gone unchallenged. One year later, nothing has changed despite over a dozen states prioritizing legal action against sweeps casinos.

Social Gaming Leadership Alliance executive director Jeff Duncan declined to address the question of why sweeps casinos weren’t fighting back, as prediction markets are now, citing proprietary and legal issues. The group did not answer a later request for comment. Possible reasons have been floated by analysts, including the burden of overturning an agency order and legal costs.

Regulators keep sending orders

Operators have generally complied. The New York attorney general’s office said a June 2025 cease-and-desist letter led VGW to stop offering virtual coin gambling in the state. VGW later agreed to an $8 million settlement, which the company said was not an admission of liability.

The Michigan Gaming Control Board announced on October 8 that it sent cease-and-desist letters to 33 offshore operators offering casino games, sweepstakes-style games or sports betting. The board did not say which recipients run sweepstakes games. The Illinois Gaming Board sent letters to more than 60 operators in March, followed by exits and restrictions.

Tennessee’s attorney general issued orders to about 40 operators in December 2025, and the state later enacted SB 2136. Iowa’s SF 2289 now lets its gaming commission issue cease-and-desist orders and seek injunctions.

https://deadspin.com/sweepstakes-casinos/legal-news/sweeps-operators-comply-with-cease-and-desist-orders-as-states-turn-to-lawsuits/