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A study conducted by the American Gaming Association discovers that 90% of players in sweepstakes casinos are aware that sweepstakes casinos are, in fact, offering gambling. In addition, 69% of these players know that they can bet real money on these sites, and 80% also spend regularly on sweeps casinos without the usual protections offered by regulated casinos.

A new study from the American Gaming Association has confirmed what many in the gaming industry have long suspected: despite their claims of legality, online sweepstakes casinos are overwhelmingly perceived by the majority of consumers as platforms for gambling. As the popularity and advertising presence of these unregulated sites rise across the US, industry advocates and lawmakers are sounding the alarm about their impact on player safety and the integrity of the legal gaming industry.

Unregulated operators dominate online casino advertising

According to data provided by mobile analytics firm Sensor Tower and compiled by the AGA, nearly 50% of all real-money casino ads online seen by consumers in early 2025 came from offshore sweepstakes casinos. These sites, which use legal loopholes to offer casino-style games in exchange for sweepstakes entries rather than direct wagers, are exploiting vague legal frameworks in many states.

"These operators present themselves like legal, regulated platforms - but they operate outside the law and regulation," said Tres York, AGA Vice President of Government Relations. "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."

Consumers know it's gambling - and they're playing anyway

The new research dispels the notion that players view sweepstakes casinos as innocent entertainment. In fact, the study found that a majority of users see them for what they are: gambling sites.

Key findings include:

• 90% of sweeps casino users consider themselves gambling when they engage with these sites.
• 69% of users define sweeps casinos as places where they can wager real money.
• 68% say their main motivation is to win real money, not entertainment or social interaction.
• 80% of users spend money monthly on these sites, with nearly half spending weekly.

Despite these figures, sweepstakes casinos continue to operate largely outside the bounds of regulated gaming, offering none of the safeguards found in licensed environments. With no required responsible gambling measures, no consumer recourse, and little transparency, advocates warn the risks are growing.

Legal loopholes, state inaction fuel the trend

One of the most troubling elements of the sweepstakes casino boom is how concentrated these ads are in high-population states that lack specific prohibitions. The AGA's data shows the number of monthly sweepstakes players is twice as high in states that don't actively regulate or restrict such platforms.

While licensed online casinos are held to strict standards and only advertise in jurisdictions where they're legally permitted, sweepstakes casinos flood social media and mobile platforms with ads, often mimicking the design, language, and promotions of legitimate brands.

The confusion is intentional, said York. These sites are crafted to look, feel, and sound like legal gambling options, making it extremely difficult for the average player to distinguish between the two, York added.

Calls for enforcement and legislative action

As public awareness grows, the AGA is urging lawmakers and regulators to take stronger action. The association believes the findings should prompt a more aggressive crackdown on unregulated gaming and clearer policy guidelines to protect consumers. "The data is clear," emphasized York. "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."

The AGA has long advocated for a well-regulated gaming market that prioritizes consumer safety, responsible gambling, and industry transparency. This latest research strengthens the case for federal and state authorities to close the legal gaps that allow sweepstakes casinos to flourish unchecked.

VGW sweepstakes sites such as Chumba Casino, which operates in New Jersey, will start its planned phase out of the use of Sweeps Coins on the 29th of July. Meanwhile, customers can still use their Gold Coins on LuckyLand Slots, Global Poker, and Chumba Casino for social play.

New Jersey players of popular social casino platforms Global Poker, Chumba Casino, and LuckyLand Slots are preparing for big changes. VGW, the Australia-based owner and operator of the three sweepstakes casino brands, has announced it will begin phasing out the use of Sweeps Coins in New Jersey starting on the 29th of July, in response to pending legislation aimed at banning online sweepstakes gambling in the state.

VGW shared the news via email to its New Jersey user base, outlining a three-phase timeline that will culminate in the complete removal of sweepstakes play in the state by the 24th of September. The email acknowledged potential disappointment among players but emphasized that the decision was a measured business move influenced by regulatory changes.

The phase-out timeline

VGW's rollout of the New Jersey exit begins on the 29th of July, when players will no longer be able to earn Sweeps Coins through contests, login rewards, or purchases of Gold Coins. Additionally, requests for Sweeps Coins by mail will no longer be accepted. Players will, however, be able to use any Sweeps Coins already in their accounts for a limited time.

The second stage hits on August 26, when Sweeps Coins will no longer be valid for gameplay. Mail-in requests submitted on or after this date will not be processed, although players can still redeem any remaining Sweeps Coins for prizes.

By September 24, all Sweeps Coin redemptions will cease, marking the official end of VGW's sweepstakes operations in New Jersey. "While Promotional Play will no longer be available," VGW stated, "you'll still be able to enjoy all your favorite games in Standard Play using Gold Coins."

AB5447 prompts statewide shake-up

VGW's exit from New Jersey is a direct response to Assembly Bill 5447, legislation passed on June 30 by the New Jersey legislature that prohibits online sweepstakes casinos. While Governor Phil Murphy has yet to sign the bill, it is expected to become law through signature or pocket approval by August 14.

The bill specifically targets casino-style games offering redeemable or cash-equivalent prizes through sweepstakes promotions. Sweeps Coins fall squarely within that definition. In contrast, Gold Coins - which cannot be redeemed for real-world value - remain legal under the new law, enabling VGW to continue offering social gaming in the state.

VGW among several operators exiting NJ market

VGW's gradual exit follows a broader trend. Other sweepstakes operators, such as Spree and Funzpoints, have already withdrawn entirely from New Jersey - including both sweeps and social gameplay. Before them, Clubs Casino, LuckySlots.us, and Clubs Poker also exited the state.

Certain operators, like High 5 Casino and Stake.us, departed from not only New Jersey but also other regulated states like West Virginia, Michigan, and Pennsylvania. Their rationale: avoiding overlap with real-money online casinos.

States with Gold Coin-only access growing

Once the New Jersey phase-out is complete, VGW will add the state to its growing list of Gold Coin-only jurisdictions. These include Connecticut, Louisiana, Delaware, Michigan, Idaho, Nevada, Montana, Washington, and New York.

Notably, states like New York, Connecticut, and Montana also passed legislation in 2024 and 2025 outlawing sweepstakes-based gameplay. VGW halted Sweeps Coin access in New York in May, just days before the bill was passed there - a swifter exit compared to its New Jersey schedule.

While VGW's Sweeps Coin operations in New Jersey are ending, the company isn't entirely pulling out of the state. It holds a 13.9% stake in the parent company of Jackpot.com, a regulated lottery courier service. This allows VGW to maintain a small but legal revenue stream in the state, even as its core sweepstakes gaming model disappears.

Sweepstakes advocacy groups like the Social and Promotional Games Association and the Social Gaming Leadership Alliance have urged lawmakers in California to reconsider the proposed ban on sweepstakes casinos in the state. Under the proposed bill, AB 831, sweeps operators will no longer be able to operate in California, and the groups say that the legislation could push players to black market platforms that offer no consumer protections instead.

A legislative effort to ban sweepstakes casinos in California is drawing sharp opposition from major industry groups, who argue the bill threatens legal digital games and favors powerful interests at the expense of consumers.

Assembly Bill 831, introduced by Assemblymember Avelino Valencia, seeks to outlaw sweepstakes casino operators in the Golden State. The move has triggered a coordinated pushback from both the Social and Promotional Games Association and the Social Gaming Leadership Alliance, who accuse lawmakers of rushing the legislation through without proper input or analysis.

Industry calls legislation unfair and misguided

Sweepstakes operator VGW, known for running Chumba Casino and other platforms, helped form the SGLA to represent the interests of the social gaming industry across the United States. The group is led by former Congressman Jeff Duncan, who criticized the bill for lacking transparency and threatening consumer choice.

"Many Californians play online games, but this rushed proposal, which subverts proper process, would abruptly cut them off from popular, free-to-play entertainment they love," said Duncan in a statement. "It was written by those involved in the gambling industry and introduced without providing the online social gaming industry any meaningful opportunity to engage."

Duncan added that AB 831 could have broader implications for mainstream promotional sweepstakes, such as Reader's Digest contests as well as McDonald's Monopoly games. He also warned that banning legal sweepstakes platforms could inadvertently push consumers toward unregulated offshore alternatives, which offer no consumer protections.

SPGA criticizes 'backroom ban'

The Social and Promotional Games Association echoed SGLA's concerns, denouncing AB 831 as a 'backroom ban' inserted into unrelated legislation involving tribal gambling. A spokesperson for the SPGA said the move bypassed normal legislative scrutiny, including public debate and expert input.

"This isn't how sound policy gets made," the SPGA said. "A last-minute effort to outlaw legal digital games, without public debate, expert input, or economic analysis, sends a chilling message to entrepreneurs, innovators, and investors across the state." The group also emphasized the bill's potential impact on large corporations that run promotional sweepstakes programs, including Microsoft, Marriott, and Starbucks.

"California voters didn't sign on for backroom deals dictated by powerful political interests," the SPGA added. "With the state facing wildfires, a housing crisis, and a full federal assault on Californians' rights, it's astounding that any lawmaker would make banning mobile games a priority."

Tribal governments support ban

Despite opposition from the social gaming sector, the proposed ban enjoys strong support from tribal governments and organizations. The California Nations Indian Gaming Association has endorsed AB 831, citing the need to protect the state's voter-approved framework that gives tribes exclusive rights to operate gambling operations. "We support this legislation that will close dangerous loopholes and strengthen the integrity of California's gaming system," said Johnny Hernandez, Jr., vice chairperson of the Yuhaaviatam Tribal Council of San Manuel.

The San Manuel Band of Mission Indians is one of the most prominent tribal gaming operators in California, contributing to the $25 billion tribal gambling industry that supports over 112,000 jobs in the state. "Together, Tribal governments and the State of California will continue to address and take decisive action against illegal internet gaming in all its forms," Hernandez added.

Possible conflict of interest?

The SPGA pointed out that San Manuel's Yaamava Resort & Casino currently operates its own social online casino, raising questions about potential conflicts of interest. Critics of AB 831 argue that such tribal operators want to eliminate perceived competition in the social gaming space while maintaining their own digital footholds.

The California legislative session runs through September 12, though bills can carry over to the 2026 session. Both sides are expected to ramp up lobbying efforts in the coming months as the debate over the future of sweepstakes casinos in California intensifies.