US Sweepstakes Casinos Keep Growing as State Bans Reach the Affiliates

US sweepstakes casinos are being banned or restricted in more states by the month, and the segment keeps generating billions while it happens. The change that matters for anyone monetizing US iGaming traffic is who the new statutes name as legally responsible, and in California and New York the list now runs past operators to payment processors, geolocation providers, content suppliers and media affiliates.

The model runs on dual currency. Players buy one virtual currency for entertainment, which cannot be redeemed, and receive a second "sweeps" currency through promotions and bonuses that does convert to cash or prizes. A daily login hands out roughly $1 in sweeps coins for free, and a mail-in request is offered as a no-purchase alternative, which is how operators argue that no real-money gambling takes place and stay outside conventional gaming law. The category spread fast from 2019 onward, especially in states with no legal online casino. AffPapa put 2025 US revenue at about $4.5 billion, up 16% year on year, while an Eilers & Krejcik study for the Social and Promotional Games Association sized 2024 sales at $10 billion, on par with regulated iGaming. New York alone accounted for $762 million of 2024 sales, California for an estimated 17% to 20% of national revenue, and Florida for 8.5% of operator revenue in 2025, more than $1 billion in purchases.

VGW: the leader, now private

The scale is clearest at the market leader. Virtual Gaming Worlds (VGW), owner of Chumba Casino, LuckyLand Slots and Global Poker, reported $6.13 billion in global revenue for the year ending 30 June 2025 and profit of $491.6 million. Chumba Casino alone generated A$5.2 billion (about $3.7 billion), roughly 25% above the A$4.16 billion ($2.98 billion) it posted in FY2024. VGW's revenue climbed from $770 million in 2020 to that figure in 2025, a 575% rise over five years. At its peak the company held about 90% of the US sweepstakes market; it now holds under 50%.

In August 2025 shareholders voted to back founder Laurence Escalante's offer to buy the roughly 30% of VGW he did not already own, taking the company private in a deal valued at about $3.2 billion and shifting its registration to Guernsey. The same month VGW announced it would exit Canada, cutting off Chumba Casino and Global Poker for Canadian customers after 23 October 2025, to concentrate on the US. The brand has leaned on celebrity marketing including Michael Phelps and Ryan Seacrest, and VGW previously ran a $150 million Ferrari Formula 1 sponsorship that it discontinued after one year.

The bans and the affiliate liability

The regulatory squeeze is the sharpest the sector has faced. By mid-2026 at least 17 states had banned or restricted sweepstakes-style gaming, at least six operators had shut down since late 2025, and one 2026 industry analysis projected category revenue could fall 30% to 40% by the end of 2027 as enforcement intensifies. In the nine months from September 2025 to May 2026 the category went from operating in roughly 45 states to facing bans, enforcement or pending legislation in more than a dozen.

Christopher L. Boone of Venable LLP wrote in May 2026 that "New York's statute is particularly notable because it prohibits not only operating, conducting, or promoting online sweepstakes games, but also supporting them through specified service-provider relationships," a list that covers financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers and media affiliates. West Virginia Delegate Shawn Fluharty, who is president of the National Council of Legislators from Gaming States, framed the case against the model directly: "Redeemability to real money is the real issue. It is illegal gambling if it's $30 in coins and it's 30 coins."

For affiliates the practical effect is that promoting a sweepstakes brand to players in California or New York is now conduct the statute addresses by name, not a grey-area media buy. Operators that built sweeps-heavy US portfolios have seen the highest-volume states close first, and the compliant ground narrows to states without bans or a pivot toward licensed operators in regulated markets. The Social and Promotional Games Association continues to argue for regulation rather than prohibition; executive director Jeff Duncan, a former South Carolina congressman, said, "We want to be regulated. We want to pay taxes. It's never dollar-for-dollar, you're never wagering your money." The American Gaming Association opposes the model and groups sweepstakes operators with offshore sites.

There is a direct precedent for how this plays out. On 11 November 2015, New York Attorney General Eric Schneiderman sent cease-and-desist letters to DraftKings and FanDuel, calling daily fantasy sports illegal gambling, at a point when the two operators took $43.6 million in entry fees in a single weekend and the DFS industry expected around $2.6 billion in entry fees that year. A New York court agreed the contests were gambling under existing law, after which the legislature rewrote that law to legalize fantasy sports as a game of skill. The same pressure that closed sweepstakes states is feeding the argument that licensing online casino is the cleaner fix, a debate now live in New York and Virginia, where sweepstakes filled the gap a regulated iCasino market would otherwise hold.