Why the US Is Divided on Sweepstakes Casinos

Sweepstakes casinos are causing quite the legal stir in the US. 

For the past half-decade, this new type of free-to-play online casino, where players can take advantage of no-deposit bonuses from Sweepsgods.com and potentially exchange virtual ‘Sweeps Coins’ for cash prizes, has exploded far beyond what any investors could have predicted, currently sitting at a market value of $9.7bn (£7.2bn) that’s expected to grow to $13.49bn by the time 2031 arrives.  

So, how are these freemium sweepstakes casinos raking in billions? Well, it has a lot to do with their virtual coin packages, which players can purchase once they register accounts. If, say, you were to play in the popular Drake and Adin Ross-backed Stake.us, which a lot of the popular Kick streamers use, its cheapest coin package starts at $20 for 200,000 Gold Coins and 20 Sweeps Coins. 

A growing number of lawmakers now view this as an unregulated form of gambling, as players are essentially exchanging money for Sweeps Coins to potentially win prizes, leading to California, New York, and a handful of other states recently passing legislative bills to have sweepstakes casinos outright banned or heavily restricted (New York Attorney General Letitia James even labelled the casinos “illegal, dangerous” with the capability to “seriously ruin people’s finances”. 

State Bans Keep Coming Against Sweepstakes Casinos, with More Set to Follow

Last year, California, Connecticut, Montana, New Jersey, and New York all passed legislation to ban sweepstakes casino gaming platforms, signalling the first major wave of bans seen in the US. 

The California and New York state bans were especially harmful to the sweepstakes market, where existing player counts and revenue streams were already huge. 

The anti-sweepstakes casino legal movement in the US has not slowed down in 2026, either, as Indiana, Maine, and Tennessee have also joined the movement by passing their own bills. 

Oklahoma has joined the crackdown, with lawmakers overriding Governor Kevin Stitt’s veto of SB 1589 to restrict dual-currency sweepstakes games. 

Minnesota is also currently pushing to pass its own bill against online sweepstakes games that use dual-currency systems and mimic real-life gambling, having also become the first state to successfully ban ‘prediction markets’. 

The Social Gaming Leadership Alliance (SGLA), a sweepstakes casino advocacy group made up of popular operators like VGW and Play Studios, has continuously voiced its displeasure at recent state bans, accusing them of being driven by “a campaign of deliberate misinformation from parties with clear vested interests” that will lead to a huge “win for the black market”. 

Interestingly, the SGLA has even attempted to build a social plus regulatory framework to tempt states away from passing legislative bans, at one point promising Indiana upwards of $20 million a year from player purchase taxes. 

So far, at least, no states have opted to collaborate with the SGLA and have instead gone ahead with their intended bans, although it’s largely expected that the organization will attempt to do the same with future states that attempt bans. 

There’s No Clear Answer to the Legal Divide 

With all the legal movement against sweepstakes casinos going on, there is still no clear answer as to how to handle the legal grey area in which they operate. 

As sweepstakes casinos don’t involve any direct real money wagering — players must instead bet either free-to-play Gold Coins or prize-winning Sweeps Coins — it means they are technically not classified as gambling under US law, as these virtual coins have no monetary value in real life. 

However, where legal problems arise is that you can purchase these coins using your own money and then potentially win prizes off the back of it, making it closely resemble actual gambling in the eyes of lawmakers. 

The sweepstakes casinos themselves argue that their no-purchase required policies and freemium Gold Coins make it so that players are never under any financial pressure, so these sites shouldn’t be put under the same umbrella as popular online casinos such as FanDuel and DraftKings. 

The US has also adopted a pro-gambling approach over the past decade, having legalized sports gambling and embraced the rise of prediction market sites, which have completely taken over at the moment. 

From the perspective of VGW and other operators, it’s all fair game, yet state lawmakers remain entirely split on the issue and the potential of further state bans looks set to continue for at least the next few years. 

Drake and Others Have Been Named in Player-Filed Lawsuits

Despite sweepstakes casinos claiming to be entirely safe for players to use, there’s been a significant uptick in the number of player-filed lawsuits against them over the past year. 

Bizarrely, rapper Drake, who at one time was reportedly paid $100 million-a-year as part of his marketing deal with the casino brand Stake, has been named in several lawsuits alongside streamer Adin Ross from players accusing them of being part of a “misleading” promotional scheme by these casinos. 

American Idol host Ryan Seacrest has also been named in a lawsuit as part of his collaborative work with Chumba Casino, which remains the most popular sweepstakes casino in the US according to Blask's Brand's Accumulated Power (BAP) data. 

International Expansion is Expected Following US Crackdown 

The sweepstakes casino market in the US may be projected to reach over $13bn by 2031, yet operators within the industry are on uncertain footing. 

Laurence Escalante, CEO and Executive Chairman of sweepstakes casino operator VGW, has even stepped down from his position following legal problems in his personal life, as well as questions over his leadership during turbulent times for the sweepstakes casino market. 

It’s now expected that many US-based operators will launch international expansion to both the Canadian and Australian markets, as well as open their doors to more offshore players from different nations to make up for lost player and revenue counts. 

Outside of the US, sweepstakes casinos remain largely unregulated in most other countries, meaning the market potential is largely untapped and won’t go unnoticed by operators.