US Market Report Sweepstake Casinos
Sweeping Changes Ahead?
Sweepstakes casinos have exploded in popularity across the U.S., creating a multi-billion-dollar market that doubles as a customer funnel for major iGaming brands. But what began as a
clever legal workaround is now under fire. Regulators in multiple states are challenging the model, questioning whether these platforms are simply unlicensed gambling in disguise.
This extract, from a report created in collaboration with GameOn, looks at how the sweepstakes model grew so quickly, why it has become strategically important to operators, and what mounting legal pressure could mean for its future. The report forms part of GO Intel - the
insight and intelligence arm of GameOn. Built by industry specialists and powered by AI, GO Intel delivers clear, commercially focused research tailored to operators, suppliers, and regulators navigating fast-moving markets. To receive GameOn’s latest reports, including this sweepstakes feature and upcoming deep dives into virtual sports, Africa, and emerging European markets, visit
gameon.im/go-intel and subscribe for updates.
Te sweepstakes casino (or social casino) market in the United States has rapidly grown into a multi-billion-dollar sector, serving dual roles as a profitable standalone industry and as a powerful customer acquisition funnel for real-money iGaming operators. Using a legal sweepstakes model (with virtual cur- rencies and ‘no purchase necessary’ entry methods), companies like VGW (Chumba Casino, LuckyLand Slots, Global Poker) have attracted over one million US players nationwide. Tis model not only generates significant revenue - with
player purchases expected to exceed $11bn in 2025 - but also allows iGaming brands to build nationwide audiences and loyalty in states where online gambling is not yet legal. Operators such as DraftKings, BetMGM, and Rush Street Interactive leverage social and sweepstakes platforms to establish early brand presence, gather user data, and cross-promote their real-money offerings, all while avoiding traditional licensing requirements. However, this once ‘grey area’ industry is now facing un- precedented regulatory scrutiny. State attorneys general and
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gaming commissions are intensifying enforcement, arguing that many sweepstakes casinos are essentially unlicensed gambling operations. In New York, for example, Attorney General Letitia James in 2025 issued 26 cease-and-desist orders to sweepstakes casino platforms, deeming the wagering of cash-redeemable virtual coins to be illegal gambling under state law. Similarly, the Michigan Gaming Control Board and Attorney General have coordinated actions to shut down major sweepstakes operators, asserting that even with ‘free play’ options, these sites involve an unlawful exchange of consideration for a chance at prizes. Other states - including Washington, Kentucky, Louisiana,
and Montana - have pursued aggressive measures ranging from court battles to new legislation explicitly banning or re- stricting sweepstakes casinos. Tis regulatory storm is fuelled by concerns that these
platforms are unsupervised online gambling in disguise: they evade gambling licenses and taxes, offer no guaranteed fairness audits, and could pose risks of fraud or problem gambling, es-
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