The sweepstake casino model grew rapidly in 2025, attracting millions of US players. It also attracted increased regulatory scrutiny. We review the year and assess what can be expected.
The sweepstake casino model, in which players use virtual currencies rather than real money, with sweep coins redeemable for prizes, has grown from a niche format into a significant segment of the US online gaming market. In 2025, sweepstake platforms collectively generated several billion dollars in redemption activity and attracted a player base running into the tens of millions.
Why the model works
The dual-currency sweepstake model operates legally in 45+ US states without requiring a state gambling licence. Players purchase Gold Coins for entertainment play; Sweep Coins are distributed through promotions and are redeemable for prizes including cash equivalents. Because players are not wagering real money in the traditional legal sense, the model does not constitute gambling under most US state laws.
Growing regulatory scrutiny
The rapid growth of the sector has attracted attention from state attorneys general and gambling regulators in several jurisdictions. Some states, including Washington and Michigan, have moved to restrict or clarify the legal status of sweepstake casinos. Operators entering the market in 2026 must conduct thorough legal analysis on a state-by-state basis and maintain compliance programmes that monitor regulatory developments in real time.
The Federal Trade Commission has also begun examining marketing practices in the sweepstake sector, with particular focus on how coin values and redemption processes are communicated to players.
The compliance framework matters
Not all sweepstake implementations are legally equivalent. The robustness of the legal framework, including the alternative means of entry (AMOE) requirement that allows participation without purchase, the coin valuation methodology, and the prize redemption process, varies significantly between platforms. Operators must work with specialist sweepstake legal counsel to ensure their model is defensible across their target state footprint.
The 2026 opportunity
Despite increased scrutiny, the sweepstake model remains a compelling route into the US market for operators who cannot or choose not to pursue state-by-state regulated gambling licences. The addressable market of 45+ states represents over 300 million potential players, a scale that no individual state gambling licence can match. Operators with a well-constructed legal framework, strong responsible gaming controls, and a high-quality game library are well positioned to capture market share in 2026.