Opponents Remain Vigilant About Sweepstakes, ‘The Gateway Drug To Prediction Markets’

“We’ve been so focused on prediction markets, we haven’t talked about sweepstakes in a while,” host Victor Rocha said to kick off Wednesday’s New Normal webcast, titled “From Gray Market to Target: The Expanding War Over Sweepstakes Gambling.”

And wouldn’t you know, by the second half of the conversation between Indian Gaming Association Conference Chairman Rocha, Light & Wonder Global Head of Government Affairs and Legislative Counsel Howard Glaser, and iGaming Capital Director Melissa Blau, nearly the entirety of the focus had flipped back to the threat presented by prediction markets. In a way, it was a fitting analog to the way the last couple of years have gone for those with an eye on gray-market gaming: It seemed sweepstakes-style products had everyone’s attention, but before long prediction markets seized the spotlight.

As is frequently the case with The New Normal, the speakers were all on the same side of the issue; advocates for social gaming with sweepstakes-style prizing, or “Social Plus” as they prefer to be called, were not represented on the video call. But from the perspective of those who are pleased to see states cracking down on sweeps and are rooting for a similar fate to befall prediction markets offering a form of sports betting, the feeling represented Wednesday was perhaps best summed up by Glaser saying, “You can’t take your eye off the ball.”

Regarding sweeps and PMs, Glaser said, “It’s all of a piece — the inundation of unregulated gaming threatens to strangle the industry. [Sweepstakes] was the gateway drug to prediction markets. … The job isn’t finished yet. … You can never let up on this level of illegal gaming.”

Glaser noted that at one point in the not-too-distant past, sweepstakes sites were projected to earn $12 billion from U.S. customers in 2026, but with 12 states having banned them in the last two years and many more working toward that goal, the latest projections have been reduced to $3.5 billion.

Blau, however, said she has doubts about that updated projection and thinks the number may still be closer to $12 billion. “I’m not sure we should be taking the victory lap quite yet,” she insisted. “You make illegal a dual currency, they come back with a quadruple currency or a single currency.”

Echoed Rocha, in typically fiery Rocha fashion: “Sweepstakes hasn’t gone away. You would think that California [would kill them] with this big dagger into the heart of the industry — but we find out they have no heart.”

California Gov. Gavin Newsom signed a sweepstakes ban last fall, and the platforms were prohibited in the state beginning in 2026.

From the minors to the big leagues

Glaser compared sweepstakes operators to The Keystone Cops, considering them a relatively bumbling opponent, and one that prepared the regulated industry for the harder-to-defeat prediction markets. “We’re going from single-A ball with the sweepstakes guys right to the World Series,” Glaser said in comparing the two challenges.

“Sweepstakes caught us flat-footed,” Rocha admitted, “but prediction markets, we went into this thing with eyes wide open.”

The panelists noted that some sweepstakes backers have pivoted toward asking to be regulated, but that approach, according to Glaser, has gotten “zero traction that I’ve seen in any state.”

Blau was at the SBC Americas Summit in Fort Lauderdale, Florida last week, and she observed that attendance was down overall, in large part because there seemed to be fewer people from the sweeps side of the industry there. Glaser said bluntly, “I’m more worried about prediction markets than I am about sweepstakes at this stage of the game,” and he noted the investment dollars aren’t lining up behind sweeps companies anymore.

There are other verticals besides just those two that concern the panelists. So-called “skill games” remain a contentious topic in many states, as do historical horse racing games with slot-like mechanics.

Glaser doesn’t expect any of it to go away completely, especially with only eight states having legalized real-money online casinos to date.

“There are scarce legal opportunities to do online real-money gaming, and there is a lot of demand for it,” Glaser said. “So as long as that’s the case, we’re going to keep having this conversation every six months. This is a consequence of leaving the void open and not firmly closing the door. You’re playing Whac-a-Mole every darned day.”