Shaping the evolution of sweepstakes casinos
Sweepstakes are attracting plenty of attention lately – and a glance at the latest map of legal igaming jurisdictions in the United States offers a clear reason why.
Despite generating a substantial 28.7% increase in gross gaming revenue (GGR) to hit $8.4bn in the US last year, online gaming remains unregulated in the vast majority of US states – 44 – versus just seven where the required legislation has been passed.
However, sweepstakes have long been seen as a way of giving players an experience that resembles igaming in jurisdictions where real-money games are either illegal or unregulated.
In a sense, some have traditionally considered such activities to operate in a vacuum. Strikingly, though, the opportunities presented by sweepstakes casinos are being increasingly recognised by operators as more than a mere vehicle to bridge the regulation gap in markets where igaming potential remains untapped.
What are sweepstakes casinos?
Sweepstakes casinos operate a ‘freemium’ approach, without taking real-money wagers. Typically, this involves processing virtual tokens obtained at no cost that can then serve as play money for accessing in-game features. These virtual currencies can be exchanged for cash or prizes.
Of course the concept itself is far from new – the term ‘sweepstakes’ actually dates back as far as 15th Century England – and in a modern-day context, such products have been marketed to the public by some operators for more than a decade.
However, a relatively recent explosion of interest has led to a belief that now is the ideal time to fully take advantage of an enormous opportunity.
US growth
The US has driven the growth of the global sweepstakes market, which expanded at a compound annual growth rate (CAGR) of 89% between 2019 to 2022, reaching a value of $3.1bn, according to Eilers & Krejcik Gaming.
Fast-forward three years, and the segment is projected to generate a whopping $11bn in 2025 – surpassing regulated igaming in terms of both reach and revenue.
Accordingly, competition is hotting up, with more than 25 new sweepstakes casinos having launched in 2025 alone – bringing the total number to more than 140.
Amid this explosion of interest, igaming software and online gambling platform provider NuxGame believes it is ideally positioned to ride the crest of the wave.
“Sweepstakes casino will take off, and we will be one of the companies that will shape the evolution of it and make it more transparent and engaging,” NuxGame chief operating officer Denis Kosinsky said.
Justified optimism
There is good reason for Kosinsky’s optimism.
NuxGame officially launches its full turnkey sweepstakes solution this July; but it started its journey in this space much earlier.
Rather than jumping into the market with a half-baked product, NuxGame has focused on gaining a forensic understanding of the sector and building a solution from the ground up.
“We took the time to study player behaviour and check out other platforms to learn the regulatory frameworks and monetisation strategies,” Kosinsky said.
“We have now built a feature-rich, legally compliant and scalable platform that is ready to go. So, while this product is new, the foundation of it is based on our current turnkey solution. It’s not just a rushed add-on; it’s a standalone tech system.”
Strategic support
The solution builds on NuxGame’s established dual balance platform, which facilitates the use of virtual currencies, as well as the provider’s customisable prize pools.
However, the overall aim, according to Kosinsky, is to deliver a strategy – and not just a product.
“We can cover everything from turnkey lounges to deep integration, dual balance, support, localised pricing, KYC, chat, shops and achievements – all native, all simple, and the bulk in one ecosystem,” he said.
“Our roadmap also includes advanced analytics and AI-driven personalisation, which should bring legal clarity, high-speed time to market, and optimum product scalability. So basically, we do not just create a skin – we deliver for clients an engine that they can work with.”
“Criticism of sweepstakes usually comes from misunderstanding, which is why it is important for operators to stick to the rules and be transparent.”
Legal clarity
Legal clarity will be particularly important in markets like the US, Kosinsky said, with NuxGame providing flexible options in the backend to comply with regional regulatory requirements, from age restrictions to prize limits. Furthermore, NuxGame can also provide additional guidance on legal matters and regional nuances.
NuxGame also works closely with partners like Jumio to apply industry-standard Know Your Customer and Anti-Money Laundering protocols, while facilitating responsible features such as spending limits and self-exclusion tools.
“Operators get a platform that’s both fun and compliant, with players feeling secure, regulators gaining transparency and operators reducing risk without compromising the experience,” Kosinsky added. “Compliance is key, and we are investing in legal intelligence, content variety and features so that operators who stay ahead on compliance and deliver real engagement will win.”
Such an approach is critical in helping to address any criticism of sweepstakes in the broader gambling space, according to Kosinsky.
“Criticism usually comes from misunderstanding, which is why it is important for operators to stick to the rules and be transparent about how prizes are won,” he added. “We focus on documentation, legal reviews, support and tools to stay compliant. If you run transparently and with responsibility, then it is a valid and exciting way to engage players.”
AI-driven automation
Beneath the surface, AI is not only being leveraged for player segmentation, bonus personalisation and predictive retention models, but also automated management of daily login bonuses and loyalty tiers.
Ultimately, the aim is to remove the heavy lifting of a launch by reducing costs, improving retention and supporting long-term growth, with the operator able to focus on growing its brand by amplifying the social element surrounding sweepstakes.
On this point, players can be onboarded via platforms like Facebook, Telegram, Google and TikTok, with sweepstakes classified as promotional contests rather than gambling.
Building on this, NuxGame’s software provides social chat features, the supplier’s signature gamification offerings such as leaderboards and live wins, as well as a refer-a-friend programme – which can be hugely impactful in driving first-time depositors and retention.
“Players come for fun, but they will only stay if they have the right rewards, the right interactions and if they totally understand the platform and the experience they should get from it,” said Kosinsky.
“So, the tiered system is powered by a shop, where players can choose products with their sweepstake coins – and this shop can include anything an operator is willing to offer – from flights and cars to Netflix subscriptions.
“Also, the chat features between players are a must, because they can speak about their winnings and their shared experiences, and it makes the platform much more transparent. With this, and the daily, weekly or monthly login rewards, it’s all up to the operator – we give them the tools.”
Partner support
NuxGame works with affiliate marketing solutions provider Cellxpert among other partners, to optimise strategies to attract and retain players.
Through a flexible, connected toolkit that is supported by such partners, operators can “grow smarter, and not just bigger,” Kosinsky explained.
Building on such fruitful collaborations, NuxGame is now focused on teaming up with the best sweepstakes casinos to bring its engaging solution to players.
“We are investing in platform growth, expanding our game catalogue, improving tooling and are working closely with operators,” Kosinsky said.
“We help our partners to co-create new models and not just reconstruct old ones, and we want to be the partner of serious operators that will win with us.”