The Complete Idiot’s Guide To Sweepstakes Casinos

Most of your questions about the rapidly growing vertical answered in one handy conversation.

If you’re on an orbit passing anywhere near Gambling Land, there’s a pretty good chance that in recent months you’ve observed a newer subset of online casinos, popularly referred to as “sweepstakes casinos,” gaining traction. Chumba, High 5 Casino, McLuck, Pulsz, any of these sound familiar?

Well, their combined growing revenue and visibility has simmered hot enough to get the category onto the list of enemies at the American Gaming Association, as well as that of some regulated operator lobbyists who have seen the category as a clear and present competitive danger.

But you’re not here for us to wax poetic about lobbying turf wars. The purpose of sweepscasinos.net guide, dearest dimwit, is to identify these so-called “sweepstakes casinos” and explain what they are and how they exist. 

So, let’s just start right here. You ask:

What is a “sweepstakes casino”?

It's an internet social casino — which is a website or program where one plays virtual and live-dealer casino games on the internet — that includes sweepstakes promotions. The common use of "sweepstakes" in the name indicates, in effect, the method by which the casino can legally conduct for real stakes.

Is that because online casinos are illegal?

Well, online casinos are governed and legal by government authorities in seven American states so far (Connecticut, New Jersey, Michigan, Delaware, Rhode Island, Pennsylvania, and West Virginia), yet in the remainder of the states, state law does not expressly allow them. But the owners of these social casinos employing sweepstakes promotions are (based on my knowledge) completely adhering to a set of laws governing sweepstakes contests that, essentially, makes them compliant and legal.

You're referring to sweepstakes like Publishers Clearing House, or cereal/snack box prize sweepstakes where you give your e-mail or mail in a contest mail-in form?

Yes, exactly. Currently, Nabisco is running a “Snack and Play” contest where 50 entrants will win a Nintendo Switch and other prizes. You’ll typically see certain legal terms and phrases in these promotions, and it’s based on way state law sets them up (more on this below):

All kinds of companies — from apparel to food to athletic wear to furniture companies — run promotional sweepstakes contests in an effort to boost sales and connect with customers or prospective buyers.

Yes, but usually they're not submitting entries into an internet casino, are they?

Right, it's typically a prize such as a video game in the above case or perhaps clothes, holiday, event tickets. And then some future date after the contest has been opened, sponsoring company for the sweepstakes contest will hold a random drawing, and the stated number of winners will be called upon to claim their prizes.

Perhaps like a trip to a casino?

Ahhh. I mean, sure, in theory, but let's just leave that in the other compartment, OK? The truth is, for these sweepstakes to be legal, one of these three things has to be removed from the equation:

• Prize
• Chance
• Consideration

The chance and and prize, well, that's easy enough to see, we hope. The chance can be a random drawing. To qualify as a legal promotion, the organization running the sweepstakes will offer some Alternative Method of Entry (AMOE). That's what all the "NO PURCHASE NECESSARY" is about.

You don't really have to purchase an actual Nabisco item or whatever to participate in these contests that are being held under this type of promotion. You can fill out the form or send in an entry, and you'll be just as likely to win as some person who did purchase and got their entry card for the chance drawing.

That's what consideration is?

Technically, yes. It's a technical definition that refers to something of value for something else. But in sweepstakes, consideration is taken out of the picture so you don't have to pay something, or give up something, in return for entering into the contest.

Right, but wasn't this supposed to be some kind of description of these "sweepstakes casinos"?

Yes, for crying out loud, I am trying! The point is, owners of casinos have basically taken this system, and used it on casinos, and whereas there are plenty of critics who feel that it's crazy or illegal, it actually does comply with the law and regulations as I have attempted to outline above.

So the thing that people are getting when they sign up with a casino offering sweeps promotions … what is it?

Thanks. Yes, they're getting coins to play at the casino. Either of two kinds of coins.  It might vary, but generally there are "gold coins," which are rewarded and can be used in one part of the casino, and also "sweeps coins," which are sometimes added in as a promotional item and can be used in another part of the casino. This is known as a dual-currency system.

The gold coins, well, they're spent for entertainment, to play online casino games just because and for the enjoyment. 

Video games? 

Yes, sure thing. And then the sweeps coins, that's where it diverges. Players can, if they meet play-through requirements, actually redeem sweeps coins for real cash. Through PayPal or through ACH or an array of payment processors.

So in that regard, it does sort of feel like a real casino. And people who want to get more sweeps coins, well they do sell varying amounts of gold coins that … just so happen to have a certain number of sweeps coins as well.

But you can't really do anything with those coins.

Well, you can use them for fun, play non-prize casino games, use different features. People really play a lot of games on their phones. But that is not necessarily the point.

So what is point?

The point is that these “sweepstakes casinos” are, barring any transgressions that have not yet been discovered, operating legally and in compliance to the letter of the law in about 41 U.S. states where they have become popular.

You’ve used the term “social casinos.” So, that’s something different?

“Sweepstakes casinos” are a form of social casinos, but with a non-sweepstakes social casino, there’s no currency that can be withdrawn. Straight social gaming offers only play money. You can still use real money — it's like video games, where you can spend in-game currency to purchase additional features and make it potentially more fun. But you can't win real money or prizes. Social casinos make money on the corporate end from those in-game purchases and advertising.