Sweepstakes Casinos Surged Toward $7B Market — But Legal Clouds Loom

Sweepstake and social gaming made headlines this year. A massive wave of growth has turned what was once an underground niche into a significant segment of the gaming and entertainment landscape. 

Industry watchers estimated that the space would generate $6.9 billion in revenue by 2025. That’s over a 2x increase from approximately $3.1 billion in 2022, a sharp rise that suggested the industry would continue to soar with additional awareness and adoption.  

However, leading gaming analysts Eilers & Krejcik Gaming (EKG) have recently dialed back optimism. Their forecast calls for a more modest 2025 net revenue of about $4.0 billion, plus a possible 10 percent decline to $3.6 billion in 2026 due to regulatory pressure.

The forecast shift reflects growing concerns in the industry about mounting legal risk. States moving to restrict or ban sweepstakes platforms have had a dramatic impact, as operators and vendors have started pulling back in some markets. Though this has not prevented new casinos from launching in states where it is available.

As with any other industry that sees astronomical growth, sweepstakes gaming is headed into a recalibration phase. Regulatory shifts and other new developments continue piling up, leaving operators and vendors to figure out the optimal pivots. 

State Battles Over Legalization and Regulation

In several states, the winds of change are blowing for sweepstakes casinos. As interest has soared, so too has scrutiny of the dual-currency model of operation. While it technically checks off the right boxes for existing laws, state regulators in some markets aren’t so sure.  

In California, AB 831 passed with flying colors. The bill effectively bans sweepstakes casino platforms, and opens liability to not only operators, but providers and suppliers. With Gov. Newsom’s signature last week, the ban goes into effect on Jan. 1, 2026. 

California is not alone, with populous states such as New Jersey and New York among the others that have taken action over the course of an eventful 2025 for the industry. Fewer available markets translate into a smaller addressable audience.  

Viewed through that lens, the pessimistic tone of revised forecasts seems appropriate. The sweepstakes casino industry isn’t going away, but change is inevitable as regulatory frameworks continue to evolve. 

Pushing Forward in a Shifting Market

Sweepstakes and social gaming have come a long way from their early days as niche diversions. What began as a small corner of the gaming world has grown into a multi-billion-dollar sector attracting millions of players. 

The model has faced turbulence this year with regulatory challenges. It’s not all doom and gloom, with several positive signs to build upon. As Sweepsy reported, PlayStudios is preparing to launch its own sweepstakes platform in qualified U.S. states later this year and more than 38 new sites have launched.

That serves as a strong signal that established companies still see major upside in the format. Operators are also finding new ways to keep players engaged while shifting focus to sweeps-friendly markets.  

On social media, platforms are using giveaways and influencer tie-ins to extend reach and build stronger communities around their brands. It’s a shift toward engagement strategies that go beyond simple gameplay, and it’s working in many cases. 

The combination of innovation, strategic focus, and continued player demand suggests that while challenges remain, the future for sweeps is far from bleak. The industry has already proven that it can adapt, so it’ll be fascinating to see how the next chapters develop.