A sweepstakes casino is a clever way for online gaming platforms in the U.S. to stay within legal boundaries. Players get to enjoy casino-style games without spending money upfront, which makes it feel more like entertainment than gambling. For operators, it’s a cost-effective setup that skips a lot of the red tape and expenses that come with traditional casinos.
What is a Sweepstakes Casino
Sweepstakes casinos give people a fun of classic casino games with a chance to win real prices—without having to gamble with real money. People can play for free while still having a shot at cash or gift cards.
Here’s how it works: instead of using real cash, players use virtual tokens—Gold Coins (GC) and Sweeps Coins (SC). GC is just for fun, with no cash value, while SC, which players can get through promotions or as a bonus with purchases, can be redeemed for real money or prizes.
When signing up, players get free GC to start playing. Some sweepstakes have extra rules, like eligibility checks before a prize can be claimed.
GC is all about entertainment, while SC gives a player a real chance to win. When the player signs up, they get some free GC to start playing right away. Some sweepstakes might have extra rules—like making sure a player's entry meets the requirements before they claim a prize.
So, how do these casinos make money? It’s all about optional purchases. Players don’t buy SC directly, but they often receive it as a bonus when purchasing GC. For example, if someone spends $50 on GC, they might get 50 SC as a bonus. Since 1 SC can be redeemed for $1, they’d have the option to cash out $50 later.
This setup keeps sweepstakes casinos legal in most U.S. states and countries where traditional online casinos are restricted. Since there’s no direct gambling with real money, they don’t fall under traditional gambling laws—though payments can sometimes blur the lines and create legal gray areas.
Who Needs to Start a Sweepstakes Casino
A sweepstakes casino gives fruitful opportunities to both startups and seasoned entrepreneurs.
Entrepreneurs and Startups
If you’re looking for a business with a high earning potential but with low entry barriers, sweepstakes casinos could be the perfect opportunity. Unlike traditional online casinos, you don’t need expensive licenses or hefty startup costs. With the right approach, you can launch quickly and start seeing returns in no time.
Existing Online Businesses
If you’re already running an online casino, a sweepstakes casino can be a smart add-on to boost revenue and keep users engaged. Expanding into sweepstakes gaming is a great way to reach a broader audience without the hassle of securing additional gambling licenses. It’s an easy way to diversify your offerings and appeal to new player demographics who might not visit a traditional casino.
Requirements of Sweepstakes Casino
Here what you need to operate with our support
Personal Documents
- Valid Passport (for all personnel)
- Recent Bank Statements
- Utility Bill (dated within the last 3-6 months)
- Curriculum Vitae (CV)
- Clean criminal records (issued by official authorities)
Corporate Documents
- Proof of Funds
- Certificate of Incorporation or LLC formation documents
- Articles and memorandum of association
- A detailed business plan
- Detailed description of sweepstakes software
- Third-party certification verifying software fairness and compliance
- Server location and data security details
- Details of all shareholders with ownership percentages
- Detailed Anti-Money Laundering and Know Your Customer policies
The exact required documentation depends on the jurisdiction you choose.
How to Set Up a Sweepstakes Casino
Step 1: Register a U.S. Business
To operate legally, you need a registered company in the U.S. An LLC is the fastest and most affordable option, with flexible taxation. A corporation is a better choice for those seeking investors, as it provides more credibility if you plan to partner with bigger businesses.
Most operators register in Delaware or Wyoming due to their business-friendly regulations. Nevada and New Mexico are also viable alternatives. Nevada, notably, offers strong privacy protections for business owners.
Having a U.S. resident own at least 10% of the company can help to build trust with banks and payment processors. This person will receive mail and serve as a point of contact for banks. Having a business partner with industry experience can also improve approval chances.
If you don’t have a local partner, MGL Solutions provides a nominee director service through a trusted law firm. We will help you to meet compliance without giving business control to an unknown individual.
Step 2: Secure a Physical Office
Banks and payment processors require a real office for a sweepstakes casno; a mailing address is not enough. A legitimate business presence includes actual office space, utility bills in the company’s name, a landline phone linked to your U.S.-based company, and a sign with your business name on the office door. Some financial institutions may also request photos of the last requirement as a part of their verification process.
Step 3: Prepare Compliance Documents
To get approved for banking and payment processing, you need specific policies, including Anti-Money Laundering (AML), OFAC Sanctions, Responsible Gaming, Data Protection policies, and Certification of Control. These documents can cost between $6,000 and $10,000, depending on the provider. It makes sense to find reputable law firms to increase your chances of approval with financial institutions.
Step 4: Obtain a Legal Opinion
A legal opinion confirms that your business model complies with regulations. This document is essential for opening a settlement bank account and gaining trust from financial institutions. Many banks reject applications without this document. Costs range from $20,000 to $40,000.
Step 5: Open a U.S. Bank Account
Banks are selective when working with sweepstakes businesses. To get approved, you must submit all business documents, including compliance policies and a legal opinion. In addition, you need to make an initial deposit, typically between $10,000 and $100,000. Remember that a strong initial deposit proves your financial stability, making you an attractive partner for banks and payment providers. Partnering with a high-risk-friendly bank that accepts sweepstakes businesses can significantly increase your chances of success.
Step 6: Set Up Payment Processing
Once your bank account is active, you can apply for payment processing. Providers prefer a U.S. business with an active bank account and require compliance documentation, a business plan, and, if available, a processing history. If you’ve previously operated a licensed gambling business, it can improve approval chances. A strong business plan with realistic expectations for sweepstake work will also enhance your opportunity to set up a fruitful partnership.
Sweepstakes Casino Regulations
When launching a sweepstakes casino, you don’t need a gambling license because players do not have to use real money to play. These casinos operate legally by using a unique dual-currency system.
Since there isn’t an official licensing process, their operation relies mainly on legal interpretations. As a result, regulations can often change, making it important to keep up-to-date. For example, some U.S. states that previously allowed sweepstakes have recently restricted them, including Washington, Idaho, Michigan, Florida, New York, Tennessee, and Rhode Island. However, before 2025, only five states had these restrictions.
We’re here to help you stay informed. You can follow our news channel for the latest updates.
Why Choose MGL Solutions
Starting a sweepstakes business involves legal, financial, and operational setup. This challenging path can be costly, with unpredictable delays and uncertainties. MGL Solutions streamlines the process by taking care of every step, including:
- Company registration and structuring for your future sweepstakes business
- Access to trusted banks that support sweepstakes businesses
- Legal and compliance guidance to ensure business approval
- Various payment solutions to provide seamless transactions for your users
- Ongoing professional guidance to support your growth in the U.S. market
While we handle the challenges, you can launch and scale your business without dealing with regulatory hurdles on your own.
Before launching a sweepstakes casino, you need a registered U.S. company with a bank account. This is an essential step toward meeting compliance with financial regulations.
MGL Solutions makes it even more effortless by handling everything for you:
- Company Formation – LLC or Corporation in the most business-friendly U.S. states
- Banking & Payments – Access to banks that work with high-risk businesses
- Legal & Compliance Support – Full guidance on meeting regulatory requirements
- Ongoing Support – Help with growth and scaling
