A multi-billion-dollar gray market known as sweepstakes casinos

How sweepstakes casinos turned a legal loophole into a multi-billion-dollar business.

Every month, millions of Americans play online casino games, wager real money, and win real cash. Officially, though, these platforms aren’t classified as gambling — they’re labeled as “social games.” We’re talking about sweepstakes games.

How it works

In the United States, online casinos are officially legal and regulated in only seven states. Everywhere else, sweepstakes platforms fill the gap — sites that, by law, aren’t considered casinos at all.

Here’s how it works in practice. You buy Gold Coins with real money. These coins have no monetary value and are meant purely for entertainment, just like in typical social games. But there’s a second layer — Sweeps Coins, which can be redeemed for real cash. They’re usually given as a bonus when you purchase Gold Coins.

That’s the entire loophole. The platforms use two separate currencies: one for play, as in a free mobile app, and another that represents real, withdrawable money.

Sweepstakes casinos use the exact same slot machines you’ll find in fully licensed online casinos. You’re playing the same popular titles — Gates of Olympus, Dead or Alive by NetEnt, or Pragmatic Play, even live roulette and blackjack by Evolution. On paper, though, none of it is considered gambling.