American online gambling operators were alarmed by news about the upcoming administration.
The U.S. federal government is likely to launch a campaign against quasi-gambling products in 2025. Analysts from Regulus Partners have highlighted the rise of “grey” gambling products like sweepstakes casinos which could prompt a possible Trump Administration intervention.
Let’s explore what sweepstakes casinos are, why they are so popular in the USA, and what their future might hold.
What Are Sweepstakes Casinos?
This is a free-to-play casino similar to a typical mobile game where players buy or earn tokens to play without cash out. However, there is a big difference: users can redeem gaming tokens for valuable prizes.
There are two types of virtual currencies:
- Gold Coins (GC): Tokens used for gameplay only and have no monetary value.
- Sweeps Coins (SC): Tokens earned through promotional purchases and giveaways that can be redeemed for cash prizes or other rewards.
Players receive GC coins while signing up. They are free-to-play.
Some sweepstakes may combine random selection with specific requirements, where entries must meet rules (valid submission, correct format), or confirm eligibility before prizes are awarded.
You might wonder: how do sweepstakes make money?
The key is on-site purchases. Sweepstakes casinos use SC as tokens, each equal to 1 USD. When a player buys 100 SC, they pay $100. Upon withdrawal, they receive the same amount in USD (1 SC = 1 USD).
To sum up, the Sweepstakes model doesn’t require wagering real money. That’s why this framework works in jurisdictions where real-money gambling might be restricted, including most U.S. states.
Why Does It Work In the U.S. Market
In the U.S. gambling has traditionally been regulated by states and tribal entities. In many U.S. states, gambling (especially online gambling) is illegal.
Gambling usually includes three key elements:
- Paying money to play.
- A game of chance.
- The possibility of winning money or prizes.
But sweepstake casinos get around gambling laws because they don’t meet all these elements. Players can enter the game for free, they don’t need to spend real money to redeem Sweeps Coins, the primary currency is only for fun and has no real-world value.
Since participation doesn’t require payment, they aren’t considered gambling under U.S. law. They are regulated by laws designed for promotions, not casinos. That’s why they became so popular in the United States.
There is a critical mass of US legal workarounds for so-called “grey” online gambling. The incoming administration is known for its pro-gambling nature, which increases the likelihood of action because gambling stakeholders will be listened to.
Experts expect that the federal government might just look to clarify what is not allowed because it’s unusual for governments to stop there.
The Future of Sweepstakes Casinos
Today, the Deceptive Mail Prevention and Enforcement Act provides a partial federal carve-out for sweepstakes. But some products do seem to be over the line as quasi-casino offerings that closely resemble traditional gambling. This makes them questionable under current legal frameworks.
Many states may welcome federal clarity on sweepstakes casino rules, as it would make enforcement easier.
The iGaming market is flexible enough to cope with the upcoming campaign by the U.S. federal government and to adapt to it.
If you want to expand into new markets and demographics and build brand loyalty, sweepstakes casinos are still a strategic way to go. They offer a legally compliant alternative to traditional online casinos. A Sweepstakes model can drive growth in player numbers, income, and long-term business success.
At MGL, we provide a cutting-edge solution for sweepstakes which is gaining rapid popularity, and an even better alternative to stake.us. We partner with over 80 leading iGaming providers that operate in key markets, such as the United States, Australia, Canada, and soon Brazil. We provide top payment gateways, such as PayPal (U.S.), credit cards, American Express (AmEx), and cryptocurrencies.
Contact us to learn about other possibilities for free-to-play casinos and expand your business into regions where iGaming used to be restricted.
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