Online lottery bill advances as Indiana considers sweepstakes ban
Indiana lawmakers have moved a step closer to legalizing online lottery ticket sales, but are simultaneously considering a ban on sweepstakes sites.
The House Public Policy Committee voted 9-3 on Tuesday to move forward with HB 1078, which would allow online sales, something that lottery officials have been keen on for years. They argue that the move would modernize lottery sales and boost revenue.
Commenting on the bill, Jared Bond, External Affairs Director at the Hoosier Lottery, also noted that 18 other states, including Illinois and Kentucky, already offer online lottery sales.
If approved, the bill would not take effect until the summer of 2027 at the earliest, to allow for the hiring of vendors and the implementation of safeguards and geolocation measures.
According to an analysis by the Legislative Services Agency, online sales could increase lottery revenues between US$314 million and US$629 million by the third year, potentially raising annual profits by up to US$94 million, which would be a significant boost after five years of flat sales.
The House committee also discussed a ban on sweepstakes sites, which offer games that simulate online casino gambling. Supporters of the proposed ban say sweepstakes platforms operate in a legal gray area and are essentially unregulated. However, critics warn that a ban could lead to players using offshore sites.
Further discussion on the sweepstakes ban is expected in the coming weeks.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
The Backstory
Momentum builds in Indianapolis
Indiana’s latest push to modernize its lottery while tightening rules around gray-market gambling reflects months of parallel legislative tracks. The House Public Policy Committee’s vote to advance an online lottery bill follows years of pressure from lottery officials to move sales onto phones and laptops to reverse stagnant revenues. That effort now runs alongside a separate move to police sweepstakes-style casinos that mimic online gambling without a traditional cash-wager model.
Lawmakers previewed this two-pronged approach early in the session. Beyond authorizing digital ticket sales, they have been probing how to curb products that look and feel like casinos but operate under sweepstakes or promotional structures. The tension is clear: the state seeks to grow regulated revenues while shutting off unlicensed channels it says skirt oversight and consumer protections. With iLottery projected by the Legislative Services Agency to deliver hundreds of millions in incremental sales within a few years, policymakers are trying to ensure those gains are not diluted by unregulated competitors.
Sweepstakes crackdown takes shape
Indiana’s sweepstakes effort crystallized with a separate proposal backed by Rep. Ethan Manning. The measure targets dual-currency “social casino” models that let customers buy one coin for gameplay and redeem another for prizes, a structure regulators argue simulates real-money gambling. As reported in Indiana lawmakers target sweepstakes casinos with new bill, operators that offer slots, table games, bingo or even sports-style contests under this framework would face civil and criminal penalties, including fines up to $100,000. Traditional sweepstakes awarding noncash rewards would be exempt.
The proposal mirrors a national turn against sweepstakes casinos. California enacted a prohibition to take effect in 2026, while New York moved its own bill through the Senate last year. Indiana’s bill has not yet been scheduled for debate, but its contours are clear: stop casino-style sweepstakes from expanding while the state evaluates whether and how to broaden regulated online gambling. A formal bill page, House Bill 1052, outlines the language targeting dual-currency games and prize redemption schemes.
Couriers in the crosshairs
The online lottery discussion is unfolding as lawmakers also try to get ahead of third-party courier services that sell tickets via apps and websites. A separate measure to block couriers unless explicitly authorized by the lottery commission advanced earlier, signaling Indiana’s preference for a state-controlled digital rollout rather than an ecosystem of intermediaries. In Indiana lawmakers seek to ban online lottery couriers, the bill’s sponsors moved to prohibit services like Jackpocket or Lotto.com from entering the market without commission approval and to require rules for bulk purchases if any pathway opens.
The courier action complements the iLottery plan. If Indiana stands up its own platform and contracts with vendors on state terms, it can control identity checks, geolocation and responsible gaming tools, then capture more margin for public programs. Shutting out or tightly regulating couriers reduces the risk that private operators set the customer experience and data relationship before the state platform arrives. It also limits potential conflicts with retailers worried about channel shift.
Signals from other states
Indiana’s measured approach borrows from recent moves elsewhere. New York’s Senate voted overwhelmingly to ban dual-currency sweepstakes casinos, with penalties earmarked for problem gambling programs, as detailed in New York Senate passes online sweepstakes casino ban. The underlying text in S5935A and the June 11 floor action on the Senate calendar show growing bipartisan appetite to shutter these offerings until a regulated iGaming framework exists.
Massachusetts is weighing a broader package that would both ban sweepstakes casinos and legalize online casino gaming under the state’s three existing licensees. The proposal, described in Massachusetts bill looks to ban dual-currency sweepstakes, would impose fines of $10,000 to $100,000 and potential prison time for violations, while taxing iCasino revenue at 15%. The bill text, H4431, has drawn pushback from industry advocates like the Social Gaming Leadership Alliance, which argued in an opposition statement that bans stifle innovation and consumer choice.
Maine is pursuing its own crackdown led by the Department of Public Safety. A measure to prohibit dual-currency wagering aims to protect newly launched tribal-partnered sportsbooks and curb the growth of prediction markets and sweepstakes products. Coverage in Maine lawmakers introduce bill to ban online sweepstakes details how platforms like Rebet, Novig and ProphetX could be ensnared. The draft, available via the Maine Legislature document portal, surfaced alongside local commentary in the Bangor Daily News that framed the effort as closing loopholes around online betting.
Together, these moves show a pattern. States are courting new revenue with online lottery or casino offerings while narrowing the space for unregulated or quasi-regulated gambling models. The timeline sequencing matters: crackdowns generally come first or in tandem, with regulated channels arriving under tight controls and tax structures.
What changes for players and the bottom line
For Indiana, the stakes are fiscal and consumer-facing. If online lottery comes online around 2027, the Hoosier Lottery expects to reach new, younger customers and recover flat sales trends. A larger top line can translate to tens of millions more for state beneficiaries by year three. But lawmakers are betting that a cleaner market—one where sweepstakes casinos are curtailed and couriers are either barred or closely licensed—will maximize those gains and reduce risk for problem gambling.
Consumer behavior will be pivotal. Critics of sweepstakes bans argue that cutting off popular platforms could push players to offshore casinos with no guardrails. Supporters counter that maintaining a permissive gray area undermines channelization into regulated products. Indiana’s package tries to split the difference: build a state-run digital lottery with safeguards, set penalties for casino-like sweepstakes that target the same customers and keep third-party intermediaries from owning the customer relationship out of the gate.
Operators will face a shifting compliance map. Sweepstakes companies that rely on dual-currency systems and prize redemption mechanics could find much of the Midwest and Northeast closed if Indiana follows New York and California. Lottery couriers will need explicit authorization in Indiana or risk enforcement. Meanwhile, casinos and vendors with state licenses stand to benefit from clearer rules and potentially first-mover advantages if lawmakers later consider broader iGaming.
The next few weeks will determine whether Indiana locks in this strategy. The sweepstakes bill’s path, outlined on the state’s legislative portal, and the courier restrictions already moving through the process signal bipartisan agreement on enforcement. If the online lottery bill stays on track, Indiana will join nearly 20 states with digital lottery options while attempting to cut off the shadow competition that grew in the absence of regulated online play.
