Texas Sweepstakes Casinos

Sweepstakes (social) casinos have flourished in Texas due to the dearth of other online gambling options.

Texas sweepstakes casinos operate using a dual-currency system to comply with federal sweepstakes laws and to avoid classification as gambling platforms.

Most social casinos in Texas offer “Gold Coins,” which have no cash value for social play, and “Sweepstakes Coins” that are redeemable for cash prizes (usually at a 1:1 ratio) through promotional play.

Critically, sweepstakes casinos distinguish themselves from conventional online gambling in Texas by allowing customers to participate in free and promotional games with no purchase necessary.

However, Texas does not regulate sweepstakes casinos, so players must use reputable operators to protect against fraud and non-payment of prizes.

BettingUSA recommends the following sweepstakes casinos in Texas:

• WOW Vegas
• Stake.us
• Casino.Click

Are Sweepstakes Casinos Legal in Texas?

It’s legal to use sweepstakes casinos in Texas, but the business model operates in a legal grey area.

On one hand, sweepstakes casinos are legal in Texas because:

• Sweepstakes casinos conform to all applicable state and federal laws
• State law does not explicitly prohibit the business model
• The law does not prohibit players from using sweepstakes casinos

On the other hand, experience shows that Texas is willing to act against games that appear to cross the line into gambling, even if they technically comply with state law.

Sweepstakes Casinos Are Vulnerable in Texas

Unlike some states, Texas has not ordered sweepstakes casino operators to cease serving residents.

However, sweepstakes casinos face legal and regulatory risks in Texas due to multiple factors:

• State officials have demonstrated a long-term pattern of strictly interpreting the definition of “gambling.”
• Past AG opinions and case law have set a precedent in which games offering ways to participate for free do not necessarily avoid classification as gambling.
• There is widespread political support for maintaining strict controls over gambling in Texas, making sweepstakes casinos susceptible to legal challenges and enforcement actions.

Two past instances involving sweepstakes promotions in Texas exemplify the risks social casinos face:

Will Texas Legalize Online Casinos?

Texas is unlikely to legalize online casinos anytime soon due to a lack of public support and unfavorable gambling laws.

However, recent polling data shows that public sentiment is softening. If the public gets on board with legalizing online casinos in Texas, any remaining hurdles will become significantly less challenging.

Primary Hurdle: Cultural Opposition

Texas has a long history of opposing efforts to legalize most forms of gambling.

A significant portion of the electorate opposes gambling over moral and societal well-being concerns, making lawmakers hesitant to support legislation that would authorize online gambling.

Opposition to gambling is prevalent at all levels in Texas politics. The official platform of the Texas GOP opposes any expansion of gambling, and opposition exists all the way up to the governor’s office.

To date, the legislature has never even considered a bill to legalize online casinos in Texas.

Secondary Hurdle: Existing Law and Constitutional Issues

Texas has some of the strictest gambling laws in the nation.

The state’s historic opposition to gambling is even enshrined in Chapter 47 of the Texas Constitution, which directs the legislature to prohibit “lotteries and gift enterprises” except charitable bingo and raffles, and a state lottery.

Constitutional amendments in Texas require two-thirds approval in the House and Senate and a majority vote in a statewide referendum.

Further, TX Penal Code § 47.02 criminalizes participation in gambling if an individual:

(1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest;

(2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or

(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.

Legalizing Texas online casinos would require significant political support and a constitutional amendment, which itself is a lengthy and uncertain prospect.

Positive Indicator: Changing Public Attitudes

Texas’ longstanding opposition to gambling expansion is weaning.

Notably, multiple polls indicate that most voters support legalizing land-based casinos and online sports betting in Texas.

For instance, the Hobby School of Public Affairs at the University of Houston conducted a survey in January 2025 that found high levels of support among Texans for expanding multiple forms of gambling:

• 73% support destination casinos
• 60% support online sports betting
• 56% support sportsbooks at sporting venues

Support for casino resorts and sports betting does not translate to similar enthusiasm for legal online gambling in Texas. Still, it points to a voter base that’s increasingly comfortable with gambling-related activities.

Additionally, the legislature has considered several bills to authorize destination-style casino resorts and online sports betting in recent years. A successful effort in those areas would provide significant momentum for efforts to legalize Texas online casinos.

Texas Online Gambling Market Potential

Texas is a massive untapped market for legal online gambling, but market research is lacking as the state remains preoccupied with sports betting and land-based casinos.

That said, comparisons to other states provide a sense of the revenue Texas online casinos could generate in a well-regulated market.

Operator Revenue Potential

Consider that the New Jersey online gambling market routinely generates $200 million+ in operator revenue per month and upwards of $2.5 billion annually.

New Jersey’s adult population of roughly 7-8 million implies an average annual per-adult revenue on the order of $300-$350 for legal online gambling alone.

By contrast, Texas’ estimated population of roughly 22.5 million adults points to a market several times larger than New Jersey’s. Comparing Texas’s per capita figures to New Jersey’s could yield an annual online gambling revenue estimate of $6-$8 billion at full maturity.

Texas Online Gambling Tax Revenue Potential

If Texas legalizes online gambling, the tax and regulatory framework will significantly impact how much revenue the industry generates for the state.

That said, Texas stands to earn a massive amount of tax revenue under any realistic scenario.

Revenue Potential Under A Medium Tax Model

Model legislation proposed by the National Council of Legislators from Gaming States (NCLGS) advises states to implement tax rates between 15% and 25%.

Applying those rates to the estimated $6-$8 billion in total revenue generated by Texas online casinos in a mature market, the state could be looking at annual tax revenues ranging from $900 million to $2 billion.

Revenue Potential Under A High Tax Model

The potential could be even greater if Texas adopts an even higher tax rate. Although high taxes hinder business development and limit market potential, some states have found the trade-off worthwhile.

For example, consider this comparison between New Jersey and Pennsylvania, two states with wildly differing tax rates, and how that data could be extrapolated to the even more populous state of Texas.

Jurisdiction	Online Casino Revenue (2024)	Tax Rate(s)	Total Tax Revenue (2024)	Notes
Pennsylvania	Approximately $2.2 billion (source)	54% on interactive slots; 16% on interactive table games	Roughly 1.0 billion (estimated)	Despite a slightly lower total revenue, the steep tax rates on its revenue mix yield high tax receipts.
New Jersey	Nearly $2.4 billion (source)	Flat 15% online gambling tax	About $358 million (reported)	Although overall revenue is slightly higher, the lower tax rate means NJ collects far less in tax revenue.

Texas Online Gambling FAQ