Amid intense scrutiny on their status as an online gambling offering in the U.S., digital sweepstakes platforms are growing their player base at around three times the rate of real-money online casinos, according to new research from Optimove.
Optimove’s report assessed whether there is long-term value in operators adding sweeps to their portfolio. The Analysis of US Sweepstakes vs. Real-Money Gaming report compiled based on data from over 67,000 players across both real-money gaming platforms (RMGs) and online sweepstakes collected between July 1 and Dec. 31, 2024.
The report concluded that sweepstakes casinos’ player acquisition growth was 16% month-over-month compared to 5% for online casinos for that period.
However, the report noted that online sweepstakes’ rate of converting new sign-ups into first-time depositors is significantly lower than that of RMG casinos, at 12% versus 51% for online casinos.
Even among those who deposit, sweeps players deposit less frequently and average deposit amounts are lower than for real-money online casinos. One-time depositors are much more common for sweeps and their average monthly deposit is $263, less than one-third of the $878 reported at online casinos.
New sweepstakes casinos players average 2.6 betting days in the first month compared to 4.3 days for online casinos, but the discrepancy shrinks in subsequent months, with 7.4 betting days for sweepstakes compared to 7.5 for real-money players.
Many mitigating factors make comparison difficult
It should be noted that direct comparisons between online sweeps and online RMG casinos are difficult for a whole host of reasons.
In terms of the player acquisition stats, sweepstakes casinos operate in a much larger market than regulated online casinos, which are limited to seven U.S. markets. Sweeps sites, on the other hand, typically operate in more than three dozen states.
So, when it comes to conversions to first-time deposits, sweeps and online casinos are hardly apples to apples. With online casinos, other than first-time offers that customers may receive such as a deposit match or a free play, new users have to immediately play with their own cash. With sweepstakes casinos, there is the option to begin playing with in-game currencies without depositing real money.
Moreover, sweepstakes operators would arguably challenge the idea that their customers are “depositing” at all, as the framework of these sites are that users purchase a currency and it is a sale of goods, rather than deposit funds directly used to play games.
Sweeps a viable channel for operators, suggests report
In a presentation at SBC Summit Americas in May, Optimove noted that online sweepstakes casino gaming grew at a compound annual growth rate of more than 75% from 2019 to 2023, driven by the ease of access to gaming options.
Ultimately, the report suggested that sweepstakes platforms “offer a scalable, low-friction entry channel for online gaming operators.”
“For iGaming marketers and operators, understanding the dynamics of U.S. sweepstakes gaming is no longer optional, it’s strategic,” wrote Optimove. “With real-money gaming still restricted in most U.S. states, sweepstakes offer a unique, fast-growing alternative to acquire and engage players legally.”
The report concluded that turning to sweeps as an additive offering can help operators optimize their portfolios, unlock new markets and grow customer lifetime value in a changing regulatory landscape. However, it noted that with sweepstakes, the data suggests the novelty fades quickly for players, suggesting that customer retention requires constant innovation and ongoing offers.
Quick sweeps bill round-up
Of course, the elephant in the room here is that online sweepstakes’ legal status is still hotly debated.
In numerous states, a range of online sweeps operators have been served with cease-and-desist notices, and lawmakers have started taking firmer action in some jurisdictions.
Montana recently became the first state to entirely outlaw online sweepstakes casinos, and proposed prohibitions are at a late stage in the legislative process in other places such as Louisiana and Ohio. Other advancing bills in Nevada and Connecticut use looser definitions of sweeps but may have the same broad effect: determining that they are not allowed.
