One of the more novel approaches from sweepstakes casino operators in response to growing pressure on the traditional dual-currency model is using subscriptions to drive revenue, not digital token purchases.
And, well, not operators … yet. Just, operator.
That one operator is Thrillaroo, the sister site of sweeps mainstay Funzpoints.
At first glance, Thrillaroo’s subscription model seems pretty airtight, legally speaking. Players pick one of three membership periods, with varying lengths and prices. That subscription fee then gives them access to both free and paid methods of playing casino-style games. And if that player loses more of the paid currency than they win, they get a full refund of the losses.
Sounds like it circumnavigates anti-sweeps gaming laws enough, right?
Perhaps not, argues one prominent attorney in the United States gaming, crypto, and prediction markets sectors.
Farrell: Subscriptions may not ‘solve the core issue’
Charles Farrell is a Senior Managing Associate at Dentons US LLP. Beyond working in litigation and government investigations, Farrell is also a strategic advisor to businesses operating in gaming, prediction markets, and digital assets.
Among his main goals? Anticipating regulatory challenges and addressing potential issues before they escalate into larger problems.
When Sweepsy discussed the long-term viability of the subscription model with Farrell, he cautioned that “a subscription wrapper likely does not solve the core issue.”
“Regulators can be expected to look past the label and ask whether the product still contains the traditional illegal-lottery/gambling elements: prize, chance, and consideration,” Farrell told Sweepsy. “Where a user pays recurring value to access casino-style games with prize redemption, regulators are likely to argue that the subscription supplies consideration.
“Likely theories include illegal gambling/lottery, unlicensed online casino gaming, ineffective or illusory ‘no purchase necessary’ / AMOE mechanics, and consumer-protection claims where the product is marketed as ‘free,’ ‘risk-free,’ or ‘not gambling’ despite functioning like wagering.”
Farrell argued you need to look no further than what is currently happening to the traditional dual-currency sweeps casino ecosystem, with purchasable Gold Coins that aren’t redeemable and Sweeps Coins that aren’t purchasable but are able to be redeemed.
For years, this model seemed as viable as this new subscription model may seem. However, recent scrutiny — particularly in New York and California, Farrell said — has significantly peeled back the layers of that model and related it to online gambling. That same process may happen with subscriptions, or any of the other models operators are pivoting to in this new scrutinized reality for sweepstakes casinos.
Consideration risk could be elevated with subscriptions
In fact, Farrell said, the notion of using subscription fees to gain entry to an online gaming platform may create more potential problems for a sweeps operator in one key area …
Consideration.
Consideration is a key element in determining whether an activity constitutes gambling. It refers to something of value a participant provides to enter or play, such as money, an entry fee, or another thing of value (a category that sweeps opponents argue should include Sweeps Coins.)
Despite its intention, subscriptions may actually “increase consideration risk,” Farrell said.
“A subscription model may make the consideration element easier, not harder, to plead or prove, because the user is paying recurring value to participate meaningfully,” he told Sweepsy. “In a classic sweepstakes defense, the operator attempts to remove consideration through a genuine, equal, no-purchase method of entry. By contrast, if the subscription is practically tied to the gaming experience, regulators can argue the payment is not incidental but central to the product. Operators will of course argue that the subscription purchases entertainment, membership benefits, or other non-gambling value.”
Automatic refund might help, depending on mechanics
Rather than tying its economics primarily to gameplay, Thrillaroo positions its subscription model as the foundation of the business. It also offers its “Win Win Guarantee” — if a player loses more redeemable currency (Thrill Tokens) than they purchase during a subscription period, they receive a full refund of those losses (in real money) at the end of the period. Logically, that suggests Thrillaroo and any other operator employing this model can argue that its earnings are derived from membership fees rather than from player losses or wagering activity.
Thrillaroo emphasizes this point in its own marketing. This quote comes from the site:
Traditional gaming websites win when you lose. We don’t. The only money we keep is from your subscription. We win when you win. That’s a win win.
Farrell said something like a “Win Win Guarantee or refund feature may help, but only depending on its actual mechanics.”
“It is more helpful if the refund is automatic, cash-equivalent, prompt, and not subject to wagering requirements, redemption friction, or restricted site credits,” he told Sweepsy. “Even then, it does not necessarily eliminate risk because regulators may still argue that the user paid for access to chance-based prize play.”
How Thrillaroo positions its subscription plans
Thrillaroo currently offers three tiers:
- Weekly option priced at $29.99
- Monthly option for $99.99
- Bundled package that includes three consecutive monthly memberships for $289.99
Membership benefits also include entry to the platform’s Community Hub, access to exclusive livestream content, downloadable member resources, and discounted merchandise.
The plans also differ in their fine print. Weekly subscribers are limited to wagers of up to $1.50 per spin and receive a waiver of administrative fees on their first $30 in purchases. Monthly subscribers may wager up to $3 per spin and avoid administrative fees on their first $100 in purchases, while members purchasing the three-month package can wager up to $5 per spin and receive the same $100 fee-free threshold.
The Win Win Guarantee does not include the subscription fee or administrative fees.
The key issue for the durability of the subscription model will likely be whether regulators view the subscription fee, loss-reimbursement mechanism, and prize opportunities as sufficiently different from the dual-currency model of most modern sweepstakes casinos.
“They may reduce reliance on the old dual-currency structure,” Farrell said of the subscription mode, “but they put payment front and center. That is problematic for the consideration analysis.”
