Social and sweepstakes casinos have rapidly spread across the States, with estimates showing the global market is worth $10 billion and growing. These gaming platforms fill the gap as an alternative and legal playing option to real money casinos, which are unavailable in most US states.
But how do these social gaming sites work, how fast is the trend growing, and how have they traversed US laws to offer casino games almost nationwide?
The legal landscape of online gambling
The US is one of the fastest-growing gambling markets. Still, with each state left to decide if they legalize online gambling independently, the paradigm shift from land-based casinos to online gaming has not been uniform. This is especially true for online casinos, which, as of November 2023, are only legal in six states. By contrast, mobile sportsbooks are legal in 26.
The majority of US players support legal online gambling, but the only option available for most is offshore casinos or sweepstakes sites.
The game changer – sweepstakes and social casinos
Many players have chosen this option, enjoying a freemium model. As a result, the number of casinos like this available to US players is on the rise, matching the demand. It’s important to note that there are two types of platforms: social casinos and sweepstakes casinos.
Social casinos
These tend to be run by real money operators in the USA ((BetRivers.Net, PENN Play, and more) and provide casino games that can be played free of charge. This includes online slots, table games, live dealers, and poker. Some even offer sports betting.
Under the social casino model, players earn free virtual coins through bonuses or buy them and can use them to play games and win more. These coins cannot be cashed out or exchanged.
Sweepstakes casinos
The sweepstakes model differs. Along with the free virtual coins, a second currency is offered, which players can spend on entering sweepstakes competitions to win real money prizes, gift cards, or other rewards. Players cannot purchase these coins; they are given as gifts when buying virtual coins. This is all explained in detail by Casino Cabbie’s Fortune Coins review.
Like social casinos, sweepstakes casinos also offer players the ability to buy coins once their free daily bundles run out. However, unlike depositing and playing at a real money casino, the outcomes of sweepstakes are not tested or guaranteed – it’s more luck of the draw.
What’s in it for the operators – An early gateway to brand loyalty?
Of the two legal gaming platforms discussed, social casinos focus less on monetization and more on free play. So what’s in it for them?
Most US real money operators view social casino gaming platforms as a chance to create brand loyalty with players. They hope that when online casinos are legalized, they’ve already got their foot in the door and a loyal customer base familiar with their platform and product.
What’s the market worth, and how fast is it growing?
In 2021, the global social casino market was estimated to be worth $10bn. According to estimates, it’s projected to grow at an astonishing rate of 23% between 2023 and 2031. While we cannot pinpoint the exact figures for the US, experts consistently cite North America as the social casino market leader.
The social gaming market generates significant revenue, which attracts investors and means the market will increase further. But it’s not unchallenged, and some significant issues haven’t received much attention.
Legal challenges to social casinos and sweepstakes
There is a growing list of states, like Washington and Idaho, where sweepstakes casinos do not operate, and a new legal challenge on the horizon that has called these apps “highly addictive” and “extraordinarily profitable.” Should the case be won, this could disrupt the status quo.
For many, the issue is that these sites essentially offer an addictive product that’s akin to real money gambling, the only difference being a hard-to-grasp business model and, in the case of sweepstakes, significantly reduced odds of a payout than at a legal online casino.
Recent cases
Washington is one of few states that prohibits sweepstake competitions, and legal action has been taken against social casinos that try to operate in the state, such as the case brought against IGT in 2018.
The latest challenge to social gaming apps in the US was announced in November and is a class action suit brought by a Nevada resident against Amazon. The wording of the case is damning:
“Social casinos are so lucrative because they mix the addictive aspects of traditional slot machines with the power of Amazon to leverage big data and social network pressures to identify, target and exploit consumers prone to addictive behaviors.
Simply put, the social casino apps do not, and cannot, operate and profit at such a high level from these illegal games on their own. Their business of targeting, retaining and collecting losses from addicted gamblers is inextricably entwined with Amazon.
Not only does Amazon retain full control over allowing social casinos into its store and their distribution and promotion therein, but it also shares directly in a substantial portion of the gamblers’ losses, which are collected and controlled by Amazon.”
Are social casinos all that bad?
There’s a solid argument to be made for the right of consumer choice in this debate. Shouldn’t those who want to play casino games and purchase virtual coins be allowed to do so? And what’s the damage in partaking in social gaming? One of the biggest issues with this line of argument is gambling addiction.
Both social and sweepstakes casinos have spread casino games across the USA and skillfully monetized their product without crossing the line into the technical definition of real money gaming and breaking state laws (in most cases). Consequently, these platforms lack regulation over game safety, fairness, payouts, and player protection protocols, such as problem gambling support and monitoring.
As technology continually increases the quality of online gaming products, addiction is becoming a more salient issue, especially in the USA, where problem gambling figures are skyrocketing. These casino platforms make highly immersive gambling products easily accessible to all.
Playing in free mode doesn’t necessarily negate the risks, as it can normalize longer playing sessions while removing obstacles that would typically cause a break in gambling sessions, such as financial constraints. Twinned with the lack of regulation and accountability present with this gaming platform, it’s potentially a ticking time bomb as well as an unfair gamble, as in many cases, players are buying coins to spend on untested games with no calculated payouts.
The Bottom Line
The spread of social casino games and sweepstakes represents a shift in how Americans can access traditional forms of entertainment, making it far more accessible. But there’s a reason gambling products are regulated, and it’s a simple one: they are addictive.
However, for now, the social casino trend is here to stay, with more players joining the game every week. This may galvanize state lawmakers into picking up the pace and legalizing real money online casinos sooner than anticipated.
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