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The Emergence of Sweepstakes Games: A New Way to Bet

The legal gambling landscape in the United States grows more diverse by the day and is ever changing. While there was only one state (Nevada) with widespread legal sports betting before the repeal of PASPA in May of 2018, there are now 39 legal U.S. states with sports betting. 

There are also seven states in which online casino games are legal, and a patchwork map of states that offer a newer version of daily fantasy sports (DFS 2.0) through companies like Prize Picks and Sleeper.

Weaved into this intricate web are sweepstakes games, which are technically free to play but have another layer in which customers can spend money on a virtual currency for the possibility of using that virtual currency to win actual money. Sounds a lot like gambling, doesn’t it?

Fliff, 10 Ten Gaming, Blazesoft, FSG Digital, Gold Coin Group and High 5 Entertainment are a few examples of sweepstakes companies.

This article will examine why sweepstakes games have swept the nation and why regulators (and sports betting operators) are concerned.

What are sweepstakes games?

Sweepstakes games have been around for many years. If you think of the Monopoly Game at McDonalds, that’s an example of one. To meet the legal definition of gambling, a game needs to have three elements: prize, chance and “consideration,” which is another way of saying there is a cost to playing the game.

But technically, there is no cost to play the sweepstakes games, as users can simply sign up, play with virtual currency and not have an opportunity to win any real money.

However, sweepstakes games don't have as rigorous a sign-up process as sports betting apps, which require a driver’s license or social security number. And they only require users to be over 18 to play. 

There are many types of sweepstakes games, but some are similar to slots and blackjack. Users play with free “coins” that have no value but can purchase other sweeps “coins,” which can then be used to cash out into real money. Companies also give out limited amounts of the sweeps “coins” for free under the “no purchase necessary” rule for sweepstakes, so users can mail a letter to an address and get the sweeps “coins.”

Learn More About Sweepstakes Casinos

Why is this an issue?

The American Gaming Association recently called into question the legality of sweepstakes games in a memo, saying that they aren’t facing the same scrutiny from regulators as legal U.S. sportsbooks and online casinos. 

Part of the memo reads: “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. These sweepstakes-based operators have weak (if any) responsible gaming protocols and few self-exclusion processes. There is no independent product testing to ensure basic fairness to players, and although many claim players must be 18+, age verification procedures if they exist, are often questionable. The opaque nature of these operations also presents a prime opportunity for illegal activity and enriching bad actors.”

In other words, legal iGaming casinos can only operate in seven states and are subject to taxation and regulatory oversight, while sweepstakes games can be offered in nearly every state with limited regulatory oversight.

Several states, including Connecticut and Michigan, have forced out sweepstakes operators like VGW, and more cease-and-desist orders are likely to follow.

Sweepstakes and social gaming operators formed the Social and Promotional Gaming Association (SPGA) in August 2024 to form an advocacy group for sweepstakes games and work with regulators and consumers to help show the legality and legitimacy of the games and ensure that everyone understands how they work.

The sweepstakes had an estimated gross revenue of $4 billion in 2023, which only grew in 2024. This will be an issue to monitor closely in 2025.

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