The US sweepstakes casino sector is entering its most active regulatory phase to date. What began as a legally compliant workaround for states without online casino regulation has become a priority target for lawmakers, attorneys general, and major suppliers. Yet despite the pressure, industry experts argue that the vertical is far from collapsing. Instead, it is maturing (and fast).
This year’s developments show a changing landscape where regulatory readiness, adaptability, and transparent product design increasingly determine who stays in the market.
Big-name suppliers exit, and regulators take notice
One of the most telling signals of change came when Evolution and Pragmatic Play, two of the world’s most influential content suppliers, withdrew their games from US sweepstakes operations. Pragmatic Play publicly stated it was halting supply “in light of regulatory developments and evolving legislation.” It’s a diplomatic way of saying that the legal risk became too high.
Legal experts have pointed out that suppliers have effectively become the easiest enforcement targets. If regulators cannot shut down every offshore operator, they can pressure large, reputable studios that cannot afford legal exposure. This dynamic has introduced a new kind of scrutiny across the entire supply chain.
With all that said, compliance is a strategic necessity these days. Platforms that can swiftly replace withdrawn content with regulation-friendly game alternatives are better positioned to remain operational when states tighten their rules.
State-level bans accelerate: from warnings to legislation
Multiple states have proceeded from issuing cease-and-desist letters to actively legislating against dual-currency sweepstakes casinos:
- California has already approved a statewide ban on dual-currency sweepstakes casinos. The decision followed high-profile legal actions targeting well-known operators and several third-party suppliers.
- New York and New Jersey are considering bills that would formally classify sweepstakes casino models as unlicensed gambling, placing them under the same restrictions as prohibited online casino activity.
- Other states are now examining comparable restrictions due to lobbying from tribal casinos, commercial gambling groups, and state lotteries, all of which see sweepstakes as direct competition.
Combined, these markets represent roughly 20% of the entire US population, which explains the sharp reaction from the industry. Analysts from Macquarie recently summarized the trend: “The tide appears to be slowly shifting against sweepstakes gaming.”
However, regulators are not unified. Several states still allow the model, others have no well-defined legislation at all, and many lawmakers are open to regulation instead of prohibition. In fact, newly formed trade associations representing sweepstakes operators are actively pushing a “Don’t ban us. Regulate and tax us” approach in multiple jurisdictions.
Growth continues despite the pressure
In parallel with legal challenges, the market continues to grow. Estimates place the US sweepstakes casino sector at around $350 million in 2024, with projections reaching $1.2 billion by 2033: a double-digit annual growth rate.
This demand remains strong because sweepstakes casinos offer players in restrictive states the closest legal equivalent to online casino entertainment. Operators also tend to react pragmatically: when a state becomes too risky, they geofence it or temporarily pause operations rather than exit the industry entirely.
This combination of high demand and adaptable operators explains why the sector’s outlook, while tense, is far from negative.
Modern Technology as a Compliance Booster
More sweepstakes casinos are making the most of Artificial Intelligence to raise player satisfaction and improve regulatory adherence. AI-based functionality is very helpful when it comes to recommending relevant games to players, personalizing promotions, and boosting retention.
Platform management-wise, AI is utilized for:
- detecting multiple-account abuse and bonus exploitation
- flagging suspicious device patterns
- monitoring for collusion or improbable win sequences
- automating compliance alerts
- running real-time fraud checks
This direction reflects what we see in regulated gambling: even without traditional cash wagering in the sweepstakes model, regulators still require platforms to maintain casino-grade integrity.
This is where modern sweepstakes casino software becomes vital. Providers capable of speedy updates, reliable geoblocking, strong KYC flows, and AI-driven fraud protection are now seen as part of the compliance solution.
The road ahead: survival through adaptation
Looking 12–24 months ahead, the US sweepstakes casino market will likely face more turbulence. Some states may finalize bans, but others could move toward licensing frameworks with structured rules, taxes, and responsible gaming requirements. Analysts say a hybrid model will appear somewhere between social casinos and regulated iGaming.
The vertical’s long-term future depends on how quickly operators and suppliers can adapt. Companies that build flexible tech stacks, maintain strong documentation, and respond quickly to legal changes will retain access to the states that remain open (and will be best positioned to scale if regulation becomes formalized).
Long story short, the era of operating under the radar is over, but the opportunity is not. Ultimately, international brands looking at US entry points should approach sweepstakes with the same discipline you would apply to a regulated iGaming platform. Those who do so will find that the vertical still has plenty of solid long-term potential, even as state frameworks move toward formalization.
