The sweepstakes casino industry has faced increasing scrutiny from state lawmakers in 2025 and 2026, with lawmakers across the country introducing bills that seek to restrict or outright ban the dual-currency model used by numerous operators. Will the broader regulatory conversation change in 2027?
Sweepsy interviewed Sean Ostrow, the Executive Director of the Social Gaming Leadership Alliance, about what 2027 holds for the industry.
“We’ll absolutely be spending a lot of time trying to work with lawmakers and educate them on what Social Plus is and, maybe equally important, what it’s not,” Ostrow said. “Any time there’s going to be a legislative effort — either proactive to regulate the industry or to ban us — we definitely plan to be testifying and speaking with lawmakers.”
SGLA expects another year of sweepstakes legislation
Ostrow testified in person at about a dozen legislative hearings nationwide this year, including in Indiana, Maryland, and Virginia, about adopting enhanced regulatory standards for the industry to protect consumers through strict age verification, data privacy, and responsible social gameplay protections, while generating annual tax revenue for states.
Ostrow said that included some remote testimony that they did “because it’s pretty tough to be everywhere at once.”
SGLA will be engaged at a similar or higher level in 2027 and many of their member companies have their own lobbying efforts as well.
“We’ll be coordinating and working together to make sure we cover all those bases,” Ostrow said.
“Lawmakers are going to have a lot of important decisions coming up. They do every year, but 2027 is no exception. It depends on the priority and that can vary state to state and certainly lawmaker to lawmaker. We’re certainly anticipating that we’ll see bills again this year. I’m not sure if those are going to be bills to ban us necessarily.”
SGLA says bans haven’t stopped consumer demand
Indiana, Maine, Tennessee, Oklahoma, and Louisiana banned dual-currency gameplay in 2026 after major markets including California and New York did so in 2025.
“Now that those are actually in effect, I think the results are lackluster if the intent was to keep people from participating in these games,” Ostrow said. “Outright banning just hasn’t worked. You have the good law-abiding operators that are SGLA members that have vacated these states, but then that hasn’t really had any impact on decreased consumer demand so now you’re just left with a situation where you have people that just go and look to find a new sweepstakes company that is continuing to operate in the state.”
Ostrow said this has made consumers more vulnerable and there are more potentially bad actors that are willing to violate the bans in those states and probably are not protecting consumers to the highest level.
“Now that we’ve seen the results in a handful of states, there’s going to be potentially less appetite to continue down that pathway,” Ostrow said. “We would certainly encourage states to take a more proactive look at what they can do to regulate and generate tax revenue and keep people safe and keep minors from participating. But a ban is not necessarily going to result in any of those things.”
Prediction markets could influence the sweepstakes debate
Prediction markets have been a major focal point all over the country. Ostrow said the industry will continue to see a lot of discussion around prediction markets next year but whether that supplants the interest in sweeps casinos remains long term to be seen.
“There’s a lot of consternation about some things regarding prediction markets that really don’t have much of anything to do with concerns around Social Plus,” Ostrow said. “Most of the conversation on prediction markets has been the sports-based prediction markets, and then also things like insider trading. Those two topics have very little to do with anything that Social Plus stands for.”
Ostrow said prediction markets have made for a more complex discussion and have given lawmakers a lot more things to consider.
Education remains a major challenge for the industry
SGLA believes the biggest challenge facing the industry will continue to be people misunderstanding the general premise of what the industry is.
“We get painted with this brush that if it walks like a duck, it must be gambling,” Ostrow said. “Our focus is going to be to continue to educate people, but also to push proactively for regulation pretty much in every state that we can get.”
Ostrow acknowledged it’s going to be very difficult to do that in all 50 states, but SGLA has tried to lay the groundwork and will continue to advocate for regulation instead of bans. Ostrow thinks the industry is going to see more states look at this — Indiana came the closest to opting for regulation over a ban — and realize that the demand hasn’t gone away.
“The demand is only growing,” Ostrow said. “You’re going to see states that are certainly looking for revenue enhancement opportunities. And the bigger that sweepstakes and Social Plus get, from a market share perspective, you’ll see a lot more interest in states looking at what some of the tax benefits could be.
“We’re going to continue to evolve and continue to be responsive to questions that we get from lawmakers but overall, we’re optimistic that 2027 could be a turning point.”
SGLA will continue working with lawmakers in states and will figure out partnership details next year.
“We have model legislation designed to give states enough oversight that they feel comfortable with the industry and the way it operates,” Ostrow said. “We think there should be some level of state oversight, definitely when it comes to things like consumer protections and keeping minors from participating.”
“All of the SGLA operators are already doing this. We think there needs to be some guardrails for the industry. Right now, there’s not any barriers to entry that would stop a bad operator from opening shop even in clear conflicts with the law in a state like California or New York.”
