Introduction to Sweepstakes Casinos
The rise of sweepstakes casinos has been a notable phenomenon in the online gaming industry. Despite states like California and Michigan passing legislation to ban sweepstakes casinos, new platforms such as LoneStar and Rolla continue to generate billions of dollars in revenue. As 2025 comes to a close, the projected growth of the sweepstakes casino industry is expected to reach nearly $7 billion.
Understanding the Sweepstakes Casino Phenomenon
Sweepstakes casinos operate on a virtual currency model, which allows them to operate legally in over 35 states. Only seven states (New Jersey, Delaware, Michigan, Connecticut, Pennsylvania, and Rhode Island) sanction real-money casinos, leaving a significant gap in the market for sweepstakes casinos. To operate legally, sweepstakes casinos like Pulsz and McLuck use a Gold and Sweeps Coins system to play available games.
How Sweepstakes Casinos Generate Revenue
The allure of sites like Wow Vegas and Crown Coins is that users don’t have to make a purchase to play the available casino games. Instead, Gold Coins are used by members to play games without making a purchase. However, many sweepstakes casinos offer a first-purchase offer, like McLuck’s 50,000 GC and 25 SC offer for $9.99. Having access to exclusive Gold Coin games, VIP points, and customer service inspired members to make an estimated $10.6 billion worth of Gold Coin purchases in 2024.
The Role of Social Media in the Growth of Sweepstakes Casinos
Thanks to social media, sweepstakes casinos are expected to continue appealing to younger demographics. According to a Pew Research study, 68% of the 18-29 demographic use Facebook, while 38% of the same demographic use X. Unlike real-money casinos, which require members to be at least 21 to join and play, the best sweepstakes casinos only require members to be 18 or 19 in some cases.
The Growth and Challenges Facing Sweepstakes Casinos
Hot on the heels of a $10.6 billion 2024, expert analysis for 2025 predicted a downturn for the sweepstakes casino industry. According to the Eilers & Krejcik Gaming study, for 2025, the sweepstakes casino industry is slated to make $4 billion in net revenue after platforms like Ace and High 5 settle their financial obligations and pay cash prizes to their members. The sudden drop in revenue expectations comes from increased pressure from states like Michigan and New York to further regulate the sweepstakes casino industry.
Regulatory Challenges
Like Michigan, New York also banned sweepstakes casinos. In October, California became the latest state to ban sweepstakes casinos beginning in January 2026 with the passage of Assembly Bill 831. Unlike real money casinos, many sweepstakes casinos don’t have licenses. Licensed online casinos pay state taxes and other fees to pay for critical infrastructure projects and other social services like public education.
Conclusion
In conclusion, the sweepstakes casino industry has experienced significant growth in recent years, with new platforms emerging and existing ones expanding their user base. However, the industry also faces regulatory challenges and increased pressure from states to ban or restrict sweepstakes casinos. Despite these challenges, the industry is expected to continue generating billions of dollars in revenue, with a projected growth of nearly $7 billion in 2025. As the industry continues to evolve, it will be important to monitor regulatory developments and their impact on the growth and revenue of sweepstakes casinos.
