With regulatory pressure being dialed up, sweepstakes casinos are facing an uncertain, and perhaps less prosperous, future. In fact, recent analysis by Eilers & Krejcik Gaming forecasts a downturn for the sweeps gaming market.
EKG revised its 2025 net revenue estimate for the industry from $4.7 billion to $4 billion, according to the EKG Line Substack. While the new figure would mark a 16% increase from 2024, the previous expectation was a 36% bump.
More ominous for sweeps, a 10% decline to $3.6 billion in net revenue is estimated for 2026, based on the expectation that operators will exit California and other states. Growth in states that have yet to take steps to ban sweeps should help offset declines in jurisdictions trying to shut them down.
EKG, though, hedges that 2026 “base case” estimate because of the “enormous amount of uncertainty related to potential regulatory developments.” EKG’s “bull case” has 14% growth to $4.55 billion for the sweeps market next year, while the “bear case” sees a 30% decline to $2.8 billion. EKG does note the “bull case” is unlikely, since California appears on its way to banning dual-currency casinos.
Sweeps casinos in precarious position in California
AB 831, a bill to ban online sweeps-style gambling in California, is cruising through the state legislature. It’s been approved unanimously through both houses, committees and various iterations.
The legislation has yet to receive a single “no” vote since being introduced in February. After being handed to the full Assembly by the Governmental Organization Committee yesterday (Thursday, Sept. 11), the bill goes to Gov. Gavin Newsom’s desk if approved by today’s (Friday, Sept. 12) deadline.
The outlook in California indeed looks dire for sweeps, although opponents of the ban vow not to give up.
Sweeps not welcome in these states, either
As the most populous state in the US, California looms large for sweeps, but several other states have made moves to kick dual-currency casinos out of their borders.
In New York – as the fourth-largest state, also highly coveted by gambling companies – a bill passed by the legislature awaits the signature of Gov. Kathy Hochul. Before the legislation was approved, 26 sweeps casino sites received cease-and-desist letters from Attorney General Letitia James.
New Jersey Gov. Phil Murphy also has the chance to sign a bill to ban sweeps into law.
Additionally, Nevada, Connecticut and Montana have enacted bans, and Arizona, Louisiana and Mississippi have issued cease-and-desist orders.
Bills are being considered in other states, and there have been multiple civil lawsuits filed against operators.
Louisiana’s move to sue VGW and MW Services, two prominent sweeps operators, for unpaid sales taxes may have given states a new strategy for going after these companies, too.
With the addressable market shrinking, and lawmakers and regulators intent on making sure that happens, the sweeps casino industry has a considerable among of work to do to reverse its trajectory.
