• Leading sweepstakes operator VGW just recently won a class action lawsuit against them
• Apple and Google currently find themselves in the middle of a RICO lawsuit related to sweepstakes casinos
• More lawsuits look set to come in 2025

Sweepstakes casinos are booming in the US.

Ever since 2020, this new type of online casino — where players don’t bet real money and instead use virtual currencies called Gold Coins and Sweeps Coins — has experienced a huge surge in popularity. By huge, we’re talking millions of players, many of which have joined Stake.us, WOW Vegas, and many of the other leading sites. And the industry itself is expected to be worth up to $157 million by 2032, making it one of the most valuable sectors in the wider iGaming industry.

So, with a fast-growing global audience and money flying through the door, everything is going great for the sweepstakes casino industry, right? Well, sort of. Yes, the industry is incredibly lucrative, but it’s recently started to come under harsh scrutiny, leading to lawsuits and all other kinds of problems. As things stand in 2025, there’s now an air of uncertainty surrounding sweepstakes casinos and their long-term future.

Here’s a simple summary of what’s happened. Since hitting the internet, sweepstakes casinos have essentially been sneaking through a legal loophole. Whereas traditional online casinos, such as BetMGM and FanDuel, are only allowed to operate in 7 US states, sweepstakes casinos are legally operating in 48+ states. It doesn’t take a genius to realise that this has given sweepstakes casinos a major advantage, but the way they’ve achieved this advantage is questionable: instead of using real money, sweepstakes casinos use Gold Coins and Sweeps Coins. This smart business model allows them to operate under a completely different set of regulatory rules that are separate from online gambling, even though sweepstakes casinos are still receiving money from players.

Ultimately,  the sweeps industry is now under major legal scrutiny, with lawsuits currently flying around and more of them expected to come in the future. Seemingly, it’s only a matter of time before sweepstakes casinos have to abide by the same rules that traditional online gambling sites do — so this guide is going to take a closer look at what’s going on.

More Lawsuits Expected to Come for Sweepstakes Casinos

When it comes to sweepstakes casinos, there are three unhappy parties at the moment:

• Traditional online casinos
• A small section of players
• A rising number of consumer protection groups.

Traditional online casinos aren’t happy because they feel that sweepstakes casinos are stealing their players away from them. After all, sweeps casinos are allowed to operate in a significantly higher number of states, making them more accessible to the average player. This has led to the American Gaming Association (AGW) recently lobbying on behalf of them, claiming in a statement that sweepstakes casinos are intentionally hiding from gambling laws and dodging state taxes.

Next, there’s the players themselves. A small number of players believe that sweepstakes casinos have effectively tricked them by replacing real money gambling with virtual coins. On the surface, this concept seems perfectly fine. However, almost every major sweepstakes casino allows players to purchase “sweeps” coins for cash, leading to them losing money if they don’t win at slots, roulette, or any of the other available games. Inevitably, lawsuits have already started flying in from players, with California being one of the states where this has happened. Here, Dennis Boyle’s lawsuit against Yellow Social Interactive, the company that owns sweepstakes casino Pulsz, claims Pulsz is an illegal gambling site. On top of this, there’s also been a huge class action lawsuit filed by a New Jersey resident against various sweepstakes operators, including McLuck, High 5, and WOW Vegas. For good measure, this particular lawsuit also access Apple and Google of facilitating illegal gambling by allowing these casinos to operate on their platforms. There are several other player lawsuits going on elsewhere, too, with these just being a couple of examples from recent times.

Finally, the consumer protection groups. Within the world of iGaming, there are quite a few protection groups designed to protect players and their overall wellbeing. Naturally, some of these groups have identified sweepstakes casinos as a major problem due to the fact they claim not to be gambling sites and yet allow players to purchase virtual coins that they can gamble with. Take the ‘Fair Gaming Advocates’, who filed a lawsuit against VGW (owner of Chumba Casino, Luckyland Slots, and Global Poker) which claimed that VGW’s sites offer casino-themed games that violate Georgia’s gambling laws. Interestingly, though, VGW won the lawsuit and it was ultimately dismissed.

What does all of this tell us? Well, considering that sweepstakes casinos are still a relatively new phenomenon yet they’ve already been subject to several serious lawsuits, it tells us that more of them are are likely to come in the years ahead. These lawsuits will not lead to sweepstakes casinos being outright banned. However, a huge shift in the iGaming industry is likely to happen and (at some stage in the near future) it appears inevitable that sweepstakes casinos will have to follow stricter state gambling laws, even if it’s on a slightly lower scale than today’s current gambling sites have to. By implementing laws against sweepstakes casinos, state lawmakers can essentially generate greater tax revenue and protect problem gamblers at the same time.

Why Sweepstakes Casinos Have Surged in Popularity and How They Actually Benefit Some Players

Despite sweepstakes casinos following a business model that allows them to bypass gambling laws, this new type of casino site isn’t necessarily a bad thing for the iGaming industry. In fact, they’ve been praised by many for:

• Offering free-to-play casino games
• Providing a place to play for those who don’t want to bet real money
• Hosting weekly tournaments and giveaways
• Giving away exciting prizes (e.g. cryptocurrencies)
• Always keeping their game libraries up-to-date with the latest slots and other major releases

For casual players, it’s the dream type of casino site, especially if you’re looking to get away from traditional gambling. However, the problem arises when some players can’t control their spending habits and end up purchasing lots of “Sweeps Coins” in exchange for real money. Often, this leads to huge financial losses for them, which is where the idea of sweepstakes casinos being sneaky gambling sites comes from.

If operators are to find a solution to this, it will put sweepstakes casinos back in an even stronger market position.Perhaps the best way in which this can be resolved is for sweepstakes casinos to put a capped limit on how many Sweeps Coins you can buy. This way, casual players can keep using Gold Coins so that they can play for free while the more competitive players can bet Sweeps Coins for real prizes but without putting themselves at any financial risk.

Summary

Until some type of solution is found, the fiery debate about Sweeps Coins and their potential hidden purpose is going to continue. At the same time, more lawsuits are destined to come, especially if more players keep losing money via Sweeps Coins exchanges. One thing for sure is that the sweepstakes movement is fast-becoming a sticky situation — and sites like Chumba Casino and WOW Vegas will have to act fast to keep everything under control.