The US sweepstakes casino market has grown into a significant part of the online gaming landscape, but its dual-currency model is facing increasing scrutiny from lawmakers, regulators as well as licensed casino operators.
The model typically combines an entertainment currency with a second currency that can be available through promotions and potentially redeemed for cash or cash-equivalent prizes. That structure has allowed sweepstakes platforms to offer casino-style games without holding the same state iGaming licenses required by regulated online casinos. The distinction is becoming harder to maintain in some states.
The Shifting Regulatory Focus
As it stands, the debate increasingly centers on what players actually experience rather than how operators describe the product. American Gaming Association research found sweepstakes casino advertising accounted for roughly half of the online real-money casino advertising seen by US consumers in early 2025. Around 90% of sweepstakes users surveyed considered the activity gambling, while 68% said winning real money was their primary reason for playing. Those numbers have helped push dual-currency platforms closer to the center of the US gambling debate.
New York legislation introduced in 2025 sought to prohibit online sweepstakes games using dual currencies that could be exchanged for prizes, cash or cash equivalents. California’s AB 831 pursued a similar approach, while Montana adopted broader restrictions covering online gambling-style activity involving wagers and payouts.
The potential impact extends beyond operators. Some legislative proposals also target payment processors, gaming suppliers, platform providers, geolocation companies and affiliates supporting sweepstakes platforms.
Where Could the Model Face More Pressure?
The state-by-state nature of US gambling regulation means sweepstakes casinos are unlikely to face one uniform national policy in the near term.
Connecticut offers an indication of where enforcement could go. The state reached a nearly $1.5 million settlement with High5Games over an online casino-style platform, including restitution linked to customers and self-excluded users. Suppliers are also beginning to reassess their exposure. Pragmatic Play opted to stop supplying games to US sweepstakes platforms, demonstrating how regulatory uncertainty can affect the wider ecosystem.
States without regulated online casinos could become particularly important. Sweepstakes platforms have been able to capture casino demand in markets where consumers cannot legally access traditional iGaming, creating an alternative to regulated operators.
A Potentially More Divided Market
Ultimately, this changing regulatory environment has the potential to make the US online casino market more fragmented. A sweepstakes casino may provide casino-style games and cash-value prizes without operating under the same framework as a licensed online casino. Players therefore need to understand whether a platform is regulated in their state and which protections apply to their accounts, withdrawals and responsible gambling options.
Licensed operators argue that this difference gives sweepstakes platforms a competitive advantage because regulated casinos face taxes, licensing costs, identity checks, geolocation requirements and responsible gambling obligations.
