The legality of non-traditional gaming products such as sweepstake casinos and event prediction markets has indisputably been the biggest storyline in the U.S. in 2025.
Cease-and-desist letters have been flooding the mailrooms of some of the biggest operators of such products and lawyers gear up to defend the legality of them. Despite this legal and regulatory backlash, it remains doubtless that sweepstake casinos and event prediction markets are compelling offers to players and are increasing in interest.
Betstack Co-Founder and Chief Executive Justin Deutsch argues that despite the legal and regulatory concern, players pay little attention to that noise.
“There is a ton of uncertainty around the legality of some of these new products, but there is little uncertainty about the consumer demand for them,” he said. “What regulatory body ultimately governs these products is up for debate, but I think these innovative products are here to stay one way or another and more and more products like them will continue to come to market.”
Deutsch’s point is backed up by the numbers too. According to a 2023 report by Eilers & Krejcik Gaming, the U.S. sweepstakes casino market is projected to grow at a CAGR of 12.5% through 2027, driven by demand for legal alternatives in restrictive states. Similarly, prediction markets – though still in regulatory limbo – are gaining traction.
Betstack is no stranger to these types of products, as it operates a prediction exchange in the regulated Ontario market. Deutsch noted that these gaming verticals have long been popular, but that legal and regulatory ambiguity have meant they are only just attracting widespread attention.
Pointing towards the success of sweepstake casinos in both Texas and California over the last couple of years, Deutsch explained that the rise of these verticals is driven by “consumer demand and too strict of regulatory oversight.”
He added: “These products are not new. The only reason they are just coming to the surface in the US is because the gaming agencies have lacked the interest or ability to facilitate innovative ecosystems where new products that consumers are in demand for can be launched.
“Sweepstake exchanges, social casinos, CFTC regulated prediction markets are not novel products, they have just never been explicitly legal in the U.S. so they have taken longer to gain popularity than other countries that are less prohibitive.”
White House has all the cards
Prediction event markets were in the courts long before the 2024 Presidential election, but since Donald Trump returned to the White House the operators have become much more public in their approach.
Crypto.com briefly introduced sports event markets, while others offered contracts for the Super Bowl 2025. With Trump’s traditionally anti-regulation approach, the operators certainly found the confidence to bring new products to the market.
The administration’s evangelist approach to crypto and web3 developments could have significant implications for iGaming, Deutsch highlighted.
“I think what is happening with Kalshi is the best example of how the Trump Administration will impact iGaming. Kalshi is very clearly offering a sports betting product. They seemingly have the full support of the Trump Administration and a Trump family member is even an advisor to the company,” said Deutsch.
He continued: “However, they want no association with the iGaming industry and the state agencies. Their preference is to focus on CFTC governance because the federal nature of it bolsters their positioning with Trump’s support. The state agencies are less impacted directly by these changes.
“In my mind the same thing will have to happen with crypto. If the gaming industry is impacted by Trump’s Administration’s outlook, it will be at the federal level. I personally don’t envision state agencies making drastic law changes because of the stance of the Federal government.”
Regardless of Trump’s friendly approach to crypto, highlighted by the introduction of the $TRUMP coin earlier this year, Deutsch has forecast that crypto use will continue to increase and, as a result, demand for its use in gaming contexts will also rise.
“Until regulatory agencies in North America start to recognize crypto as a valid form of currency for deposits/withdrawals, it will severely inhibit innovation in the space,” Betstack’s CEO said. “There are so many positive characteristics to crypto and so much demand from the iGaming consumer base for crypto payment rails.”
Future-proofing to be ahead of the pack
Betstack is not averse to these new technologies and verticals; it has tapped into crypto solutions and is also offering its PAM solutions for operators of all types.
The platform is built for sportsbooks, online casinos, ilotteries, sweepstakes/social casinos and prediction markets.
“Betstack’s roots were in the regulated Ontario market so the platform is built to the strictest of regulatory specs, however it was built initially to power a betting exchange and prediction markets so it has the flexibility to power a wider range of products than most other regulated platforms,” said Deutsch.
“The Betstack platform has always been built to be flexible and product agnostic, allowing it to power an umbrella suite of products for a brand looking to compete in the US or any other geo, which sets us apart from the competition.”
Despite the lack of crypto regulation in the U.S. iGaming space, Deutsch argued it’s important to be ready for the day when states begin to allow its use. In his view, this day is inevitable owing to that increased consumer demand. He cited a 2023 Deloitte survey that found that 38% of U..S online bettors would prefer using crypto for transactions if given the option, owing to speed and anonymity.
Deutsch said: “At Betstack we continue to build out crypto solutions and make the necessary integrations so that when the time comes when regulatory agencies recognize how much activity they are losing to grey market operators because they don’t allow crypto, we will be ready with a regulated platform that supports the initiative.”
Being ready to take advantage of future trends is at the core of Betstack’s philosophy, according to its CEO, who said that its roots have been established in developing innovative software solutions.
While the regulatory winds of change are yet to blow, Betstack is confident that when the time comes, it will be in a strong position to deliver these solutions to US operators.
As Deutsch concluded: “Right now, the biggest operators only need a platform provider that can support traditional sportsbook and casino. What happens to those brands in 3-5 years when these new product verticals take market share from these sportsbooks and casinos?
“Consumers only have a finite amount of disposable income and the more they spend on new products the less likely they will spend on the existing ones. Betstack’s plan is to be the platform of the future for every brand looking to capture the next generation of gamers and traders.”
