What is HB 2801? Pennsylvania’s Proposed Sweepstakes Casino Ban Explained

Republican Rep. Russ Diamond introduced HB 2801 on September 24, sending the measure to the House Gaming Oversight Committee. Diamond is the committee’s Republican chair, but the bill has not received a vote and has not yet been considered at a committee meeting.

Calling HB 2801 a sweepstakes bill undersells its size. The 161-page measure rewrites significant portions of Pennsylvania gaming law, covering skill games, casino and online casino taxation, fantasy contests, sports wagering, video gaming terminals and the distribution of state gaming revenue alongside the sweepstakes prohibition.

Diamond’s September co-sponsorship memo focused almost entirely on that broader gambling overhaul. He argued that the Pennsylvania Supreme Court’s skill-game ruling meant “it’s time to make some necessary and much-needed changes,” then laid out his proposal to regulate skill games, change gaming tax rates and restructure where gaming revenue goes. The memo did not highlight sweepstakes casinos, although the prohibition appears as Section 27 of the bill Diamond ultimately introduced.

Pennsylvania lawmakers had already been circling the sweepstakes issue. The Gaming Oversight Committee held an informational hearing devoted to online sweepstakes and social casinos in April 2025, while Democratic Rep. Joe McAndrew circulated a proposal that same day promising legislation to close what he called sweepstakes loopholes. His proposal was never formally introduced, according to the General Assembly’s current memo record.

At that hearing, Pennsylvania Gaming Control Board Chief Counsel Steve Cook identified the legal problem lawmakers are now trying to solve. Cook testified that “the Gaming Act’s specific language hinders the Pennsylvania Gaming Control Board from taking legal action against these sites.”

HB 2801 would give the regulator much clearer statutory language to work with.

Section 27 would create a new provision of the Gaming Act making it unlawful to operate, conduct or promote an “online sweepstakes game” within Pennsylvania. It would also prohibit a person or company from supporting or assisting with the administration, operation, conduct or promotion of those games.

The definition is important. HB 2801 targets games, contests or promotions that use a dual-currency system allowing currency to be exchanged for cash, cash equivalents, prizes or a chance to win them, while also simulating casino-style gaming.

The bill expressly includes slots, blackjack, roulette, craps, poker, draw and instant-win lottery games, keno, bingo and sports wagering. That means sweepstakes-format social sportsbooks could also fall within the provision when their model satisfies the bill’s dual-currency and prize requirements. Games that do not award cash prizes or cash equivalents are expressly excluded.

That definition gives HB 2801 more precision than a generic prohibition on “sweepstakes casinos.” Free-play social games without redeemable prizes remain outside the definition, while the familiar model built around one entertainment currency and another redeemable currency is squarely in the bill’s sights.

The enforcement provisions are equally significant. A violation could bring a fine of between $50,000 and $500,000 for each violation, revocation of an existing gaming license and disqualification from receiving one. The PGCB and Attorney General would both gain authority to investigate alleged violations, issue subpoenas and send cease-and-desist orders.

The language covering anyone who “support[s] or assist[s]” a sweepstakes operation could also give regulators a wider enforcement perimeter than the operator alone. HB 2801 does not spell out exactly how broadly that provision would be applied, so its practical reach would depend on future enforcement and, potentially, litigation.

The other half of HB 2801 is politically unusual. While lawmakers would be expressly closing the door on sweepstakes gambling, Diamond wants to bring skill-game machines into Pennsylvania’s regulated gaming system.

His proposal would allow distributed skill games and video gaming terminals in clubs, liquor-licensed restaurants and bars, and qualifying truck stops, with up to five machines per establishment. Diamond proposes taxing gross terminal revenue at 20%.

That debate has now moved from an approaching deadline into active enforcement. Pennsylvania State Police began enforcing the state Supreme Court’s skill-game ruling on October 14, after the October 13 compliance period expired.

The practical rollout has been somewhat more measured than an immediate statewide seizure operation. State Police said it reached agreements with six skill-game operators and distributors that committed to making their devices inoperable beginning October 14 and removing machines from businesses on a rolling basis. PSP agreed to give complying companies removal timelines based on the amount of equipment involved and delay seizures until those deadlines expire.

Businesses outside those agreements still face the underlying enforcement threat. State Police says unauthorized skill-game machines outside licensed gaming locations are unlawful and can be seized, with criminal charges also possible.

HB 2801 would create a potential long-term regulated home for some of that activity, but it did not become law before enforcement began. Two separate bills introduced in September - HB 2793 and HB 2795 - proposed temporary authorization for skill games through April 2027, but both also remain in the Gaming Oversight Committee without a vote.

There is also a substantial tax disagreement waiting inside any future skill-game compromise. Diamond proposes a 20% gross terminal revenue tax, while Shapiro proposed bringing skill games into the existing VGT structure at a 52% rate in his 2026-27 executive budget. Skill-game regulation was ultimately left out of the final budget signed in July.

A 32-point difference between Diamond’s proposal and the governor’s preferred rate shows how much remains unresolved even if lawmakers agree that some form of regulated skill-game market should exist.

HB 2801 remains near the beginning of the legislative process. The Gaming Oversight Committee first has to report the bill before the full House can consider it, and the Pennsylvania Constitution requires bills to be considered on three different days in each chamber before final passage. A majority of the elected membership of both chambers must vote for final passage.

If the Senate changes the House-passed version, the House would then need to concur with those amendments before the measure could be sent to the governor.

The legislative window has narrowed considerably. As of October 22, HB 2801 remains in the Gaming Oversight Committee without a vote, and the committee lists no upcoming meeting. The House currently has only November 9 and 10 remaining as scheduled voting session days before the end of the 2025-26 General Assembly.

That leaves HB 2801 with an extremely narrow path this session. Pennsylvania requires bills to be considered on three different days in each chamber, while the House currently has only November 9 and 10 remaining on its published session calendar. Because HB 2801 has not yet been reported from committee, passage under the current schedule would require lawmakers to add at least one House session day before the General Assembly expires on November 30.

If that does not happen, HB 2801 will not carry into the next General Assembly and would have to be reintroduced. The sweepstakes prohibition could still return next session as part of another gaming package, as a standalone bill or through another legislative vehicle before the current session ends.

The first meaningful development would be a Gaming Oversight Committee meeting that includes HB 2801. With no meeting currently scheduled, there is no immediate vote to watch, but Diamond’s position as the committee’s Republican chair keeps the proposal directly inside his policy portfolio.

Any committee amendment will deserve close scrutiny. The sweepstakes definition, the broad “support or assist” language and the 20% skill-game tax are all provisions that could materially change as lawmakers negotiate the larger gaming package.

The skill-game fight is already moving on a separate enforcement track. State Police began enforcement on October 14, while HB 2793 and HB 2795 - the two measures designed to create a temporary transition period - remain in committee without a vote. That puts more pressure on lawmakers to decide whether Pennsylvania ultimately wants to eliminate these machines outside licensed gaming locations or create the regulated framework contemplated by HB 2801.

For the sweepstakes industry, HB 2801 should be viewed as an active legislative threat rather than a completed ban. Even if the full gambling overhaul runs out of time before November 30, the prohibition language now gives lawmakers a ready-made framework that can be revived in another bill or in the next legislative session.