While the US igaming market has proved challenging in recent months, Alex Windsor, CMO at GameTime Digital, explains why sweepstakes has become so popular in the US and why its delicate legality might soon prove tricky
The US has always loved two things: sweepstakes and gambling. Annually, over 55 million Americans participate in sweepstakes contests (ABC News). And according to NerdWallet in 2024, 62% of Americans say they’ve gambled over the past year. Therefore, it was inevitable that the two worlds would eventually collide to create sweepstakes casinos and sportsbooks.
Since 2020, these types of sites have experienced a thunderous rise in popularity. From WOW Vegas to Rebet, millions of people across the country have started creating accounts, which has sent huge shockwaves through the industry. After all, it’s an exciting new concept, so players are naturally interested to see what the hype is all about.
So, how do sweepstakes casinos and other similar sites work? Well, it’s actually very simple. To place bets, players use Gold Coins or Sweeps Coins — not real money. These coins are virtual, meaning they have no real-world value. However, Sweeps Coins can be redeemed for prizes if you win enough of them, so there’s still plenty of incentive for players.
Beginnings
Chumba Casino is the site that started it all. Launched back in 2017 by Virtual Gaming Worlds (VGW), it’s a free-to-play social casino site that features hundreds of casino-style games, including slots, video poker, bingo, and more. Flashforward to today and the site itself has “over one million” daily players, making it a huge success.
Other companies in the igaming industry quickly saw how Chumba Casino caught fire and decided that they wanted a piece of the pie, too.
Sweepstakes sites have ultimately reaped the benefits of an exciting new niche, attracting countless players from around the world to sign up with them
This has led to a huge wave of sweepstakes casinos hitting the internet since 2017, with some of the biggest names being Pulsz (2020), WOW Vegas (2022), and Stake.us (2022). These sites have ultimately reaped the benefits of an exciting new niche, attracting countless players from around the world to sign up with them.
The list keeps growing
Currently, the number of active sweepstakes casinos in America is well over 50, with our sweeps review site SweepsKings reporting that 11 of these sites launched in 2024. It’s a big number by any stretch of the imagination, especially for a market that’s still relatively new.
Plus, more sweepstakes operators are expected to come throughout the next decade, as operators are desperate to keep taking advantage of the sweepstakes boom. It’s hard to blame them, either, as the demand for sweepstakes casinos is sky-high as the pool of players continues to grow.
Why have they become so popular?
There are lots of exciting reasons why sweepstakes casinos and sportsbooks have risen to the top of the American igaming charts. When you join one of these sites, you can:
- Place bets for free
- Access hundreds of different casino-style games
- Win rewards and prizes
- Socialise with other members
- Make new friends
Aside from the free-play aspect, one of the other major appeals is socialising. For example, most sweepstakes casinos are designed in a way that actively encourages players to interact and play against each other. This isn’t the case with traditional online casinos and gambling sites, where the aim is to simply win money.
Gen Z and Millennial players are passionate about social gaming and don’t care as much about real-money gambling, so sweepstakes sites tick all the right boxes for them
What’s interesting is that the concept of sweepstakes casinos has proven to be a major hit with younger generations. Gen Z and Millennial players are passionate about social gaming and don’t care as much about real-money gambling, so sweepstakes sites tick all the right boxes for them. This is reflected in the numbers, as 42% of sweepstakes casino players are below the age of 50. Undoubtedly, young players are really enjoying them.
Legal “loophole”
Every sweepstakes casino on the internet has a major advantage. This is because they use virtual coins instead of real money, so they’re not classed as gambling sites. This means they can step through a legal loophole and not be subjected to the same laws and regulations that traditional gambling sites are.
Let’s put this into context: sweepstakes casinos are currently legal in 48 out of 50 US states. However, only six states allow normal online casinos. From a purely financial perspective, this is incredibly appealing to sweepstakes operators, as it gives them a special type of advantage. More players can access them, so more of them sign-up — it’s that simple.
This is something that Dustin Gouker (@DustinGouker) perfectly articulated on X:
“If your choices in starting an online poker site (or casino or sportsbook) in the US are 1. Open up in a handful of states and subject yourself to taxes and regulation or 2. Open up in 40+ states with neither of those obstacles, it’s not a terribly hard choice.”
AGA action
Since 2017, sweepstakes casinos have had freedom to operate almost everywhere. However, the American Gaming Association (AGA) isn’t happy about this. In a recent statement, the AGA accused sweeps casinos of evading gambling laws, not paying taxes and failing to provide players with self-exclusion options:
“The lack of regulatory oversight presents many risks for consumers as well as the integrity and economic benefits of the legal gaming market through investment and tax contributions.”
Because the AGA has made a huge statement like this, it could potentially lead to some states in the US reevaluating sweepstakes casinos and introducing new laws. This would be an industry game-changer, as sweeps casinos would no longer have an advantage over traditional casinos and would have to abide by similar rules and regulations.
Future impact in the US
The next ten years are going to be extremely interesting for igaming in the US. At the moment, there’s a transition taking place, as more people than ever are switching from traditional online casinos to sweepstakes casinos. This makes a lot of sense, as people love the social element of sweepstakes casinos, along with the fact that they also have free-to-play games.
Following the AGA’s recent statement, big changes to state laws in the future could mean that water is poured on the ‘sweepstakes party’
However, following the AGA’s recent statement, big changes to state laws in the future could mean that water is poured on the ‘sweepstakes party’, leading to a much more level playing field in the industry. One thing for sure, though, is that sweepstakes casinos are here to stay — but they might lose some of their power if individual states decide to take action.
States are still reluctant to legalise igaming despite the growing uptake of regulated sports betting. With the barrier to entry still so high for states where online casinos are available, its easy to see why operators are going down the cheaper and far less hassle route of launching a sweepstake site.
Alex Windsor
is the CMO of GameTime Digital, a multi-channel igaming affiliate with a primary focus on the regulated US sports betting and casino market. He has been involved in the industry for over 12 years.