One of the gambling industry’s leading gaming content and technology providers doesn’t expect to expand into the sweepstakes vertical “any time soon.”
During its 2024 Q4 earnings call this week, Light & Wonder reported a 64.4% year-over-year growth in its earnings per share — from 73 cents to $1.20 — as well as a 3.5% increase in Q4 revenue, from $770 million to $797 million.
But during the Q&A portion of the call, one investor asked Light & Wonder officials specifically about the social gaming arm of their business — SciPlay — and if they had considered branching SciPlay out into the rapidly growing sweepstakes gaming market.
Their answer?
No. At least, not right now.
“At the moment, we’re watching it closely,” said Matt Wilson, President and CEO. “Obviously, it’s a fast growing category but doesn’t face the same regulations and taxes that our operator partners do across the US market.”
L&W: ‘We don’t see a pathway’ to sweeps regulation in near future
Wilson said Light & Wonder is “pro-regulated and taxable gaming in all its formats.”
Currently, sweepstakes gaming — notable for its dual-currency model where one currency (often called Gold Coins) can’t be redeemed for real money, but another currency (often called Sweeps Coins) can be redeemed for actual money — is not regulated and, thus, not taxed.
If sweeps gaming comes under regulatory oversight, Light & Wonder, which provides real-money online casino games as part of its vast gambling portfolio, may be interested.
Until then …
“We see sweeps at the moment as being unregulated and so against our vision and strategy,” Wilson said. “If they were to regulate at some point down the path and tax in the same accordance as our other markets, then we’d be willing to explore that, but we don’t see a pathway to that happening any time soon.
“In fact, we see regulation actually going the other way and many (attorneys general) in different states putting cease-and-desists out against sweepstake operators.”
Wilson is likely referring to states such as Maryland, where the gaming regulator issued cease-and-desist letters to six sweepstakes operators in January, and West Virginia, where the attorney general sent subpoenas to an unknown number of sweeps platforms earlier this month.
Back in October, sweepstakes behemoth VGW — which owns Chumba Casino, LuckyLand Slots, and Global Poker — left Connecticut following receipt of a cease-and-desist letter there.
The Social and Promotional Games Association maintains the legitimacy and legality of its sites’ models, emphasizing they follow existing laws while offering alternative options for players.
Social casinos vs. sweepstakes casinos
Currently, SciPlay operates in the social gaming landscape.
Social casinos are different from sweepstakes casinos in that games are only free-to-play at social casinos. Sweeps players, meanwhile, can play games for free using Gold Coins but they can also make Gold Coin purchases that come with Sweeps Coins, and they can play with those Sweeps Coins and eventually redeem them for real money.
Still, social casinos make money through things like in-app purchases of extra features, as well as players buying more in-game currency.
SciPlay created the social casino Jackpot Party Casino Slots.
After what Wilson called “a little monetization issue” with Jackpot Party in the second half of 2024, he expects to see the platform “reaccelerating into 2025.”
Big names currently affiliated with sweeps operators
Evolution, another leading brand in gaming content and technology, currently provides games to both real-money iGaming platforms (including FanDuel Casino and Bet365 Casino) and the sweepstakes gaming platform High 5 Casino.
To make sure Evolution’s recent deal with High 5 wasn’t just for social gaming (Gold Coins only), we played one of Evolution’s slot games — Starburst — on High 5 using Sweeps Coins, so it’s for both Gold Coin and Sweeps Coin play.
Pragmatic Play is another example. Its games can be found in real-money online casinos like FanDuel Casino and Caesars Palace, as well as a range of sweeps sites.
Big-name iGaming operators, such as Hard Rock and BetRivers, also offer non-real-money platforms (Hard Rock Social Casino and BetRivers.net). But these aren’t sweeps casinos. Both are social casinos, without any option for Sweeps Coin play. (Although, at Hard Rock Social Casino, you can redeem in-game currency for prizes at a retail Hard Rock Casino.)
Potential for regulation down the line?
So, will regulation for the sweeps industry ever come?
The SPGA hopes so. It made that clear in a statement it released after the Mississippi Senate passed a bill that would ban sweeps gaming in the state.
“Rather than enacting punitive measures that reduce innovation and consumer choice,” the statement read, “we urge lawmakers to consider a regulatory approach that enshrines transparency and consumer protections while allowing Mississippi adults to continue enjoying the fun, fair, and free-to-play games offered by social sweepstakes operators.”
Of the handful of states currently considering legislation on sweepstakes gaming, only one — New Jersey — is putting regulation on the table. The other states, including Mississippi and Maryland, are considering bills that would outlaw sweeps sites.
There is a significant amount of tax dollars to be made from sweepstakes gaming, should it become regulated.
Estimates for online sweepstakes revenue in 2025 hover around $6.9 billion. The New Jersey regulation bill taxes sweeps revenue at 15%, the same rate online casinos pay.
Say, in a hypothetical scenario, sweeps were regulated across the U.S. at a 15% tax. From $6.9 billion in revenue, that would be $1.035 million in tax dollars.