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Is the Sweepstakes Casino Bubble About to Burst?
Sweepstakes casinos are in trouble.
These online gaming platforms, which have rapidly grown in popularity, are under a lot of legal pressure.
It all started when the American Gaming Association attacked sweepstakes casinos and called for stronger regulation against them.
Since then, a growing number of states in the US have begun implementing bans and a players themselves are even filing lawsuits.
And despite still being a billion-dollar market, the sweepstakes casino bubble could very soon burst, leading to yet another major shakeup for the iGaming industry.
How Do Sweepstakes Casinos Work?
Sweepstakes casinos offer hundreds of games, from slots to roulette, but don’t let you bet real money. Instead, players use Gold Coins or Sweeps Coins. If you collect enough Sweeps Coins, you can then redeem those for prizes like cash transfers, cryptocurrencies, and even merchandise.
Alex Windsor, Editor-in-Chief from the SweepsKings site, has this to say about why the prize-winning model used by sweepstakes operators has got players hooked:
“Sweepstakes casinos have done an excellent job at catering towards a market that wants the excitement of casino games without the risk of losing real money. Once you sign up with any of the leading sites, it’s quite easy to collect Sweeps Coins for free if you take advantage of things like Daily Login Bonuses, which then allows you to compete for prizes. This is why the likes of Chumba Casino and Stake are so popular.”
The appeal behind sweepstakes casinos is that they’re essentially a free-play version of real casinos. You don’t have to bet a single dollar (something that Gen Z and Millennial players appreciate) and can take part in things like tournaments and daily challenges, making it feel much more like a social gaming experience.
It’s a fun concept that’s got new-generation players signing up in huge numbers. Even on Kick and Twitch, you can’t escape the countless streamers, including Adin Ross and xQc, who stream themselves playing inside Stake.us, WOW Vegas, and all of the other major sweepstakes casinos.
However, these sites may seem perfectly fine on the surface, but more states than ever are now starting to ban them, with California being the latest.
California Becomes Latest State to Ban Popular Sweepstakes Sites, While New York Pushes to Do the Same
Last month, Governor Gavin Newsom signed AB 831 into law, prohibiting sweepstakes casinos from operating in California from the start of 2026.
It’s the biggest blow yet to the sweepstakes market, as a large bulk of players currently reside in the Golden State.
Sweepstakes operators haven’t taken too kindly to the news and have even warned Gov. Newsom that the ban could mean California loses out on up to $1 billion annually.
Prior to California’s sweepstakes ban, which was largely driven by concerns surrounding consumer protection, the year had already seen Michigan, Montana, Connecticut, and New Jersey also outlaw sweepstakes casinos after passing their own legislative bills.
New York is another state that’s currently pushing to ban sweepstakes casinos, too, which would be of a similar level of impact to California if the Empire State is, indeed, able to pass its Bill S05935‑A into law.
New York already issued cease-and-desist notices to 26 sweepstakes casinos operating within state borders in the summer, calling them “illegal and dangerous”, so it’s extremely likely that sweepstakes casinos will officially be banned there before the end of the year.
Sweepstakes Casinos Set to Make $3.6bn in 2026, a 10% Decline
With everything going on surrounding sweepstakes casinos at the moment, it’s no surprise to learn that Eilers & Krejcik predict a 10% decline in revenue for the sweeps casino market in 2026, dropping to an estimated $3.6 billion.
It’s still a huge figure — especially when you consider the growing number of states that have banned these sites and effectively cut their revenue streams — but it’s not what Stake.us, McLuck, and other big-name casinos will want to hear.
After all, up until 2024, the sweepstakes casino market was growing at a rapid pace year-on-year, so for it to suddenly come crashing to a halt is cause for concern, and it could potentially get worse if even more states are able to outlaw sweepstakes casinos next year.
Lawsuits Are Flying
Lawsuits are also flying at the moment, causing further headaches for many of the sweepstakes operators.
It was only last month when plaintiff Justin Killham filed a lawsuit against Stake.us for “deceptive” gambling practices, with rapper Drake and Adin Ross named in the lawsuit as well due to their marketing associations with the brand.
Virtual Gaming Worlds — the operator behind Chumba Casino, LuckyLand Slots, and Global Poker — has been hit with several class action lawsuits, and there was even one filed against the company at the back-end of 2024 seeking a claim of $5 million in player damages for users in Mississippi.
Another popular site, High 5 Casino, was ordered to pay out $24.9 million in damages at the start of 2025, which is one of the biggest to-date from any of the popular sweepstakes casinos.
And now that there’s a growing sentiment surrounding sweepstakes casinos that they are actually gambling sites, albeit safer than traditional gambling platforms, the number of player-driven lawsuits hitting them is likely to increase over the coming months.
Some operators, including VGW, have started preparing for this by smartly raising their minimum player ages from 18 to 21, although it likely won’t help much in the long run.
Pragmatic Play Quits the Sweepstakes World
Just when you thought 2025 couldn’t get much worse for sweepstakes casinos, Pragmatic Play made the harsh call to pull all of its games — including player-favorites like Sugar Rush and Gates of Olympus — from sweepstakes casino sites.
Pragmatic Play decided to stop supplying its games to all US sweepstakes operators after it was named in a civil lawsuit against Stake.us in Los Angeles, accusing popular software providers like Pragmatic and Hacksaw Gaming of contributing to the “illegal gambling business”.
This has caused outrage among a big section of sweepstakes players, as it means they’re no longer able to access many of the slots and live dealer games they love.
As a result, sweepstakes casino game libraries aren’t as good as they used to be now that Pragmatic Play has ditched the market, and this could have a huge effect moving forward that leads to many existing players switching back to traditional casinos.
What’s Next for Chumba Casino and Others?
The sweepstakes casino gold rush is, seemingly, starting to slow down.
Sites like Chumba Casino, Stake.us, and WOW Vegas had a lucrative run of nothing but non-stop revenue, player sign-ups, and social media buzz, but recent lawsuits and state restrictions are starting to bite.
With more states than ever dropping out of the sweepstakes casino market and completely blacklisting it, operators are no longer able to make as much money as before.
The fact that sweepstakes casinos are having to deal with a range of other problems, including Pragmatic Play exiting the market, leaves them well and truly on the ropes.
An official sweepstakes ban from New York before the end of the year, or potentially in 2026, would compound things even further.
But is it really game over for sweepstakes?
Post-COVID, sweepstakes casinos have built a billion-dollar market and a huge global player base, so they’re not going to disappear anytime soon.
And with huge pop culture figures like Drake continuing to promote the sweepstakes casino market, there’s no reason why it can’t bounce back next year, even though it will have to adapt to the changing legal landscape.
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