Sweepstakes Casinos Gaining Steam in the US

It’s widely known that iGaming has been on the rise for the last few decades. However, the growing sweepstakes and social sector within it often gets overlooked. Fueled by stringent online gaming regulations in the US, this niche has thrived for years. The pandemic further amplified its popularity, leading to a market worth nearly $108 million.

But what’s so special about sweepstakes casinos? These platforms look and work similarly to standard iGaming platforms. They allow users to sign up for online accounts and play casino-style games from the comfort of their homes or on the go. They even offer real prizes. The answer to this question lies in their business model and primary purpose. 

Sweepstakes casinos run on the no-purchase-necessary system, which first appeared in the 1940s. This format let participants enter contests and win prizes free of charge, and modern sweepstakes gaming sites do the same. They provide online gaming content and rewards without taking rake, and their games operate with virtual currency, which winners can later redeem for real prizes.

By adopting this approach, iGaming became more inclusive and attractive to broader demographics. As you’d expect, this change led to market expansion and an increase in revenue.

Most Popular US Sweepstakes Casinos

Sweepstakes casinos carved out a niche in the online gaming arena quickly after the industry gained traction in the US. However, the market initially couldn’t compete with its traditional counterpart in number or diversity. Thankfully, prompted by the pandemic, trends have started to change in recent years.

The category’s new-found popularity and market value have encouraged many operators to join the sweepstakes landscape. Today, the US boasts tons of quality online sweepstakes platforms with an exciting gaming offer.

With millions of active users, High 5, Global Poker, and Chumba Casino remain the most prominent operators on the scene.

• Established in 2012, High 5 Casino is the oldest of the three. A strong reputation, a user base of 25 million, and an exclusive game lineup make it one of US players’ favorites.
• Global Poker followed in High 5’s tracks four years later. It’s the sweepstakes site with the broadest and most diverse selection of poker games and popular tournament formats.
• Chumba is another industry pioneer. It launched under Global Poker’s casino group, though without the emphasis on this casino classic. In contrast, the site became famous for its proprietary games and hefty welcome promotions.

Other sweepstakes notables include Pulsz, Wow Vegas, and Fortune Coins, while recent years have seen the rise of Zula and McLuck. The former debuted in 2020, just in time for the industry’s boom, while the latter four joined the fray in 2022 and 2023. With a mix of social and sweepstakes elements, enticing promotions, and growing gaming rosters, each offers something unique.

What Is the Legal Status of Sweepstakes Casinos?

Given the United States’ stringent gaming regulations, one can’t help but wonder — what is the legal status of sweepstakes casinos? How do these gaming operators manage to maintain their operations within legal limitations that typically hinder other casinos?

To answer these questions, we must refer to the US legislation. Most laws prohibit gaming and define it as risking something of value on an uncertain event, like a game of chance, in hopes of winning something valuable in return, like a real-money prize.

These rules prevent iGaming operators from offering their services in large parts of the country. However, as sweepstakes casinos function on a no-purchase-necessary system, their operations don’t fall under the category of gaming. As a result, they don’t have to adhere to these restrictions.

Sweepstakes casinos’ availability and popularity in the US states are the perfect proof. Spend some time researching, and you’ll find most places allow these sites to serve their residents. The only outright exception is Washington, which explicitly outlawed the category in the mid-2000s.

Will the Sweepstakes Casino Industry Live On?

From the looks of the industry today, sweepstakes casinos have a bright future. Even with the pandemic behind us, their popularity remains on an upward trajectory. Studies show their market value might reach over 186 million by 2028. However, one obstacle could stand in their way to success — the legal ambiguity we’ve addressed above.

The rapid growth of the iGaming sector has caused many US states to revisit their stance on gaming and modify existing laws. From traditional casinos to the sports betting industry, no category seems safe.

The recent regulations leading to a crackdown on DFS Pick’em games are the prime example. Being part of another legally ambiguous and, in turn, widely accessible genre, these games have been an integral part of DFS platforms.

However, the absence of salary caps or budget constraints that differentiate them from the standard DFS format has recently caught many lawmakers’ attention. States like Michigan and New York have prohibited the vertical, while Colorado and North Carolina are considering similar measures.

It’s impossible to predict whether sweepstake casinos will live the same fate, though their mass departure from Michigan due to regulatory changes certainly doesn’t bode well for the future. Nevertheless, the adaptable nature of sweepstakes and social platforms suggests they could stay afloat despite these challenges.