As debates heat up over the legal status and regulation of sweepstakes casinos, a newly released study by the American Gaming Association (AGA) shows that users of these platforms overwhelmingly recognize their activity for what it is: gambling. The survey, conducted online between June 11 and June 24, 2025, sheds light on user behavior and motivations, highlighting growing concerns about the impact of these unregulated platforms on the broader gambling ecosystem.
According to the AGA’s findings, 90% of sweepstakes casino players believe the activity constitutes gambling, with 69% stating they view these websites as venues to wager real money. In fact, 68% of participants cited the prospect of winning money as their primary reason for playing. These numbers suggest a stark contrast with the way sweepstakes casinos portray themselves — often resembling regulated operators while sidestepping formal oversight and consumer protections.
Consumer Behavior and Legal Gray Areas
The AGA survey involved 2,250 participants across three user segments: sweepstakes casino players, iGaming users in regulated states, and those who use free-to-play platforms. The results reveal significant engagement and financial activity among sweepstakes users. A substantial 80% reported spending money on sweepstakes games monthly, and nearly half said they make purchases weekly. These levels of spending mirror behavior observed in legal, regulated online casinos, underlining the monetary stakes involved.
Additionally, about 65% of sweepstakes casino users said they began playing specifically to win real money or tangible rewards — a number close to the 67% recorded among legal iGaming participants. By contrast, 73% of users on purely free-to-play platforms indicated that fun was their main motivation, marking a clear difference in user intent across platform types.
“These operators present themselves like legal, regulated platforms – but they operate outside the law and regulation,” said AGA Vice President of Government Relations Tres York. “There are few if any responsible gaming tools, no regulatory oversight, and no consumer protections. It’s a dangerous subterfuge that puts players at real risk.”
Aggressive Marketing and Loophole Exploitation
The AGA’s analysis, using Sensor Tower data, also highlighted a concerning trend in advertising. In early 2025, roughly half of all online real-money casino ads seen by consumers were promoting offshore sweepstakes platforms. These unregulated entities concentrate their ad campaigns in heavily populated U.S. states, where legislation around sweepstakes operations remains ambiguous or absent.
Digital platforms, particularly YouTube, have become a primary channel for sweepstakes casino promotion. Sweepstakes operators funnel nearly 59% of their ad budgets into YouTube. With fewer restrictions and lower ad costs, these companies can reach large audiences — including minors — with minimal oversight. As one writer noted, their teenage son frequently sees such ads, underscoring the widespread reach and potential risks.
Yet, as the same commentary points out, the issue isn’t simply one of morality but of uneven regulatory application. Legal operators face stringent advertising rules and higher operational costs. Sweepstakes platforms, by exploiting loopholes and avoiding state-level restrictions, enjoy a considerable competitive edge. “The genius was in finding a loophole big enough to drive an industry through while regulators stood around scratching their heads,” the article remarked.
Calls for Enforcement and Clearer Regulations
The AGA has made it clear that they are pushing for greater enforcement against what they see as unlawful gambling operations masquerading as promotional platforms. York emphasized, “Consumers see right through the ‘sweepstakes’ casino facade and they’re calling it what it is: gambling. We look forward to policymakers continuing to enforce their laws and create clarity through new policy measures to protect their residents.”
A notable aspect of the report is the use of “sweeps coins,” which can often be redeemed for cash prizes. Among players who spend money on these platforms, 67% focus on acquiring sweeps coins rather than the free, in-game gold coins, further demonstrating the financial incentive behind gameplay.
The data also show that in states where sweepstakes gambling isn’t prohibited, participation rates are significantly higher, with double the number of monthly users compared to states with explicit bans. This supports the AGA’s broader argument that a lack of legal clarity fuels the industry’s rapid expansion.
As policymakers assess how to respond to these findings, the central question persists: can calling it something else truly distinguish it from gambling? The survey, and the public’s perception, suggest not.
Source:
As Sweepstakes Casinos Ads Proliferate, Consumers Confirm They’re There to Gamble, americangaming.org, July 31, 2025
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