Alabama Sees Surge In Sweepstakes Casino Lawsuits

Alabama sweepstakes casino operators are confronting a wave of new legal challenges, with 21 lawsuits filed yesterday, pushing the total civil actions against such platforms to over 40 since the start of last year. This surge has made Alabama the state with the highest number of legal actions against sweepstakes operators in the U.S.

The recent filings, highlighted by sports betting and gaming attorney Daniel Wallach, include a case against Heuston Gaming that cites Alabama law allowing any person to recover money lost through gambling. Ala. Code § 8-1-150 permits a gambler to file a lawsuit within six months of losing money; if the original player does not act, another individual can sue on their behalf. Funds recovered go to the filing plaintiff, not the gambler.

Sweepstakes Casinos Clash With Strict State Laws

Alabama enforces some of the strictest gambling regulations in the country. The state has no lottery, no commercial casinos, and no legal sports betting. Yet sweepstakes casinos operate online, offering games that plaintiffs claim violate Alabama’s gambling statutes.

Last year, a batch of 13 lawsuits targeted operators including Stake, VGW, and High 5, but most companies continued operating in the state. The only major withdrawal was B-Two, which runs McLuck, Hello Millions, SpinBlitz, and PlayFame. Those platforms later resumed operations despite ongoing litigation, and nearby Georgia has also struggled to secure victories in similar cases.

Legal Arguments And Operator Defenses

Plaintiffs contend that these platforms primarily provide casino-style gambling, with games available continuously rather than only during promotions. They also point out that game payout rates, often around 92%, mirror typical casino slot machines, demonstrating the commercial gambling intent.

Operators maintain that their platforms are legal because users can play for free and acquire Sweeps Coins through promotions. Stake, for instance, stated it “does not operate an online casino in Alabama. It operates a social casino with free-to-play games in compliance with all relevant local laws and regulations.”

Wallach suggested that the growing number of lawsuits could eventually draw the attention of the Alabama Attorney General, potentially prompting a more forceful regulatory response.

Future Of Gambling Legislation In Alabama

While legal challenges mount, Alabama lawmakers are exploring potential reforms. Rep. Phillip Ensler has indicated he would pursue expanded gambling legislation, including a state lottery, if elected lieutenant governor. However, his term would not begin until 2027, suggesting little change in the immediate future.

Despite legislative inaction, sweepstakes casinos and online prediction markets continue operating, and a definitive court ruling in one of the ongoing lawsuits could influence the fate of the industry in Alabama. Other states, such as Iowa, have recently passed laws specifically targeting sweepstakes casinos, while Alabama currently relies on existing statutes to challenge the platforms.

A ruling against any major operator could set a precedent, potentially forcing other sweepstakes casinos in Alabama to alter operations or exit the state entirely, reshaping the local online gaming landscape.

Source:

“Alabama Sweepstakes Casinos Facing 21 New Lawsuits”, x.com “Daniel Wallach”. January 6, 2026