THE RISE OF SWEEPSTAKES CASINOS The booming popularity of sweepstakes casinos has triggered significant scrutiny across all corners of the industry. The sudden success of these platforms, accessible in nearly every state in the U.S., has drawn the attention of regulators, trade groups, and other industry factions, placing operators under a microscope. “It’s time to pull the alarm bell on this one folks: ‘Sweepstakes casinos,’” wrote Howard Glaser, Global Head of Government Affairs and Legislative Counsel at Light & Wonder, in a scathing LinkedIn post on 22 August. “Lurking behind this mushy-sounding term is a rapidly growing scheme of questionable legality which lets people play online casino games and wager real money - run by operators that skirt regulation and licensing, offer no player protections, and siphon revenue from state governments.” Glaser isn’t alone in his sweeping criticism of the controversial casino model. In August, the American Gaming Association (AGA) issued a policy statement raising concerns about the burgeoning industry, noting that companies are using “sweepstakes-based” models to “potentially skirt gaming laws and regulations” that U.S. sports betting and online casino operators must follow. “As a result, consumers are being deprived of protections and states are forgoing significant tax and revenue opportunities as this gambling replaces that conducted through regulated channels,” the AGA stated. Shortly after the AGA announcement, the Michigan Gaming Control Board (MGCB) piled on by taking action against OC Media Holdings LLC, doing business as One Country Give. According to a MGCB press release on 27 August, OC Media Holdings, based in Arkansas, had been generating revenue by selling monthly memberships that give participants entries into various “sweepstakes” advertised online and on social media. The MGCB determined that these sweepstakes violate Michigan law as they operate as unlicensed online lotteries and/or raffles. Nonetheless, sweepstakes casinos remain legal in many states where traditional online gambling is not, providing a legal alternative for players. The growth represents an economic opportunity for states if properly regulated and, despite the rising skepticism, a recent report from Eilers & Krejcik Gaming estimated the sweepstakes casino market at $5.6 billion in 2023, up 66% year-over-year 2022, with the market exploding to over $11 billion in 2025. Sweepstakes operators, like Virtual Gaming Worlds, defend their platforms by drawing parallels to promotional offers like the popular McDonald’s Monopoly game. The company that runs brands including Chumba Casino, Luckyland Slots, and Global Poker argues the use of virtual currencies and the option to play for free without purchasing coins differentiates them from traditional gambling. Tim Moore-Barton, COO of Virtual Gaming Worlds, acknowledged the growing competition in the sector and the need for regulatory compliance, telling Australian Financial Review, “We are fully committed to setting a very high bar in compliance and player protections … With a strong balance sheet and cashflows, our financial strength allows us to reinvest both for now and the future, and we have multiple exciting opportunities in development.” he said. Moore-Barton’s comments came in the aftermath of his company being ordered by the Delaware Lottery to cease operations in the state in August. VGW also faced challenges in Georgia and Michigan during the past year. Last October, VGW shut down operations in Michigan following Attorney General Dana Nessel’s order for a similar social casino to leave the state. In September, in an apparent response to the mounting criticism, 11 social gaming companies, not including Virtual Gaming Worlds, joined forces to launch the Social and Promotional Gaming Association, saying its mission is “to highlight the well-established legality and legitimacy of social sweepstakes games, providing regulators, policymakers, and consumers with a comprehensive understanding of these offerings.” Clearly, the future of sweepstakes casinos hinges on the establishment of regulatory frameworks that prioritize consumer protection and responsible gaming. But whether or not the industry can find a balance between entertainment and ethical practices, remains to be seen. —Gary Trask Growing Pains Sweepstakes casino model facing increasing regulatory scrutiny “Consumers are being deprived of protections and states are forgoing significant tax and revenue opportunities as this gambling replaces that conducted through regulated channels.” 20 GPWAtimes.org Illustration by DG-Studio / Shutterstock
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