How sweepstakes casinos work: Gold Coins vs Sweeps Coins
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A regulator-sourced explainer of the two-coin model behind sweepstakes casinos, the free-entry theory it relies on & why some US states treat it as gambling.
Two virtual currencies
Sweepstakes casinos are websites & apps that let users play traditional casino games, such as slots, blackjack & poker, using virtual coins instead of placing cash bets directly. Some of those coins, known as sweepstakes coins or “sweeps coins”, can be redeemed for cash or prizes.
The New York Attorney General’s office says these coins “can be redeemed for cash or prizes, such as Amazon gift cards.” It adds that players “typically purchase these virtual sweepstakes coins as part of a package with other virtual currency.”
The Attorney General’s office does not name that other currency. In its report on Oklahoma’s ban, The Lines describes Gold Coins as “strictly for fun”, meaning they are used for entertainment play rather than redeemed for money.
The bundling of the two currencies in one purchase sits at the centre of the legal argument over whether these sites are gambling.
The legal theory: no purchase necessary
A sweepstakes is a prize promotion in which winners are picked by chance. In the US, entry to a lawful sweepstakes is expected to be free.
The Federal Trade Commission’s consumer advice on prize scams puts it plainly: “Real sweepstakes are free and by chance. It’s illegal to ask you to pay or buy something to enter or to increase your odds of winning.” It also says sweepstakes mailings must state that you do not have to pay to participate.
That FTC guidance is written about prize promotions & scams in general. It does not address sweepstakes casinos specifically.
In New York, VGW, the company behind Chumba Casino, Global Poker & Luckyland Slots, claimed its sweeps coins “were provided for free and therefore did not constitute gambling”, according to the state’s Attorney General.
Why regulators call it gambling anyway
New York’s Attorney General rejects the free-coin argument. In its 2025 announcement, the office said that under state law, “betting cash-redeemable virtual coins on games of chance constitutes gambling, regardless of how the casino operator characterizes how players can obtain the virtual coins.”
Working with the New York State Gaming Commission, the office identified 26 platforms offering slots, table games & sports betting with redeemable coins. After it sent cease-&-desist letters, which are formal demands to stop an activity, all 26 said they were ending the sale of sweepstakes coins in New York.
In a settlement announced in 2026, VGW agreed to pay $8 million in disgorgement, penalties & costs. Disgorgement means handing over money gained through the conduct in question.
The office’s investigation found that “players could obtain ‘sweeps coins’ the same way one might purchase chips in a casino, receiving approximately one coin for every dollar spent on the platform.” It had sent VGW a cease-&-desist letter in June 2025.
The Attorney General also says sweepstakes casinos are not subject to state audits & oversight, so players “have no way of knowing whether a sweepstakes casino’s games are rigged” or whether it can cover a winning bet. Governor Hochul signed New York’s formal ban on sweepstakes casinos into law in December 2025.
The courts on virtual currency
A federal appeals ruling shows how a court treated virtual currency that could not be cashed out directly. On 28 March 2018, the US Court of Appeals for the Ninth Circuit decided Kater v. Churchill Downs.
The case concerned Big Fish Casino, an app in which first-time users received free chips & could buy more for prices from $1.99 to nearly $250. Its terms said the chips had no monetary value, but the app let users transfer chips, which could be used to sell them on a secondary market. The plaintiff, Cheryl Kater, alleged she lost over $1,000 worth of chips.
Washington law defines a “thing of value” to include credit “involving extension of a service, entertainment or a privilege of playing at a game or scheme without charge.” The court held that the chips fit that definition because they let users keep playing.
It concluded that because the chips were a “thing of value”, Big Fish Casino “constitutes illegal gambling under Washington law.” The ruling applied Washington’s statute to a social casino app & did not involve a dual-currency sweepstakes site.
The industry’s case
The Social Gaming Leadership Alliance (SGLA), the main lobbying group for these sites, now calls them “Social Plus”, according to Casino.org. The term covers free-to-play sites & apps that also sell a secondary digital currency, often called sweeps coins, which can be redeemed for money.
Sean Ostrow, the SGLA’s managing director, said: “Social games and entertainment are the core of what we do. But the ‘plus’ is more than just the opportunity to win prizes; it’s the higher standard of consumer protection and player safety that SGLA partners hold themselves to.”
The SGLA says its members agree to admit only players aged 21 & over through identity verification technology. Members must also offer responsible gameplay tools & use “best-in-class” data & financial security safeguards, the group says.
The SGLA argues that the regulated commercial & tribal gaming industries have run a smear campaign that has “spread misinformation and outright falsehoods” about how social casinos work. In New York, VGW made the related argument that its coins were free, a position the state’s investigation rejected.
Who plays & why
The American Gaming Association (AGA) commissioned an online survey, run from 11 to 24 June 2025, of 2,250 real-money online casino, free-to-play mobile casino & sweepstakes casino players. It gives a margin of error of plus or minus 3.6%.
The AGA says consumers “overwhelmingly view these platforms as gambling” & that most players treat sweepstakes casinos as they would legal gambling platforms. Its published summary does not give the underlying percentages.
The AGA also cites Sensor Tower data showing that sweepstakes casino ads accounted for half of all online real-money casino advertisements viewed in the US in early 2025.
The association is not neutral in this debate. It argues these operators “undermine the integrity of the legal, regulated gaming marketplace”, & its vice president for government relations, Tres York, said: “Consumers see right through the ‘sweepstakes’ casino facade and they’re calling it what it is: gambling.”
What a ban changes
Bans differ in scope. New York’s Attorney General reports that the state’s formal ban was signed in December 2025, but the sources used here do not set out its detailed terms.
Oklahoma enacted its ban through a veto override. Its legislature overrode Governor Kevin Stitt’s veto of Senate Bill 1589 by 34 to 10 in the Senate & 68 to 19 in the House, The Lines reports.
The ban applies only to the sweepstakes coin side of a social casino. Operators that offer only Gold Coin play may keep operating. Anyone operating or promoting a sweepstakes casino faces a minimum fine of $500, & the offence is classed as a Class C2 felony.
According to The Lines, operators have until 1 November to cease sweepstakes operations in Oklahoma, & customers will likely have until then to withdraw sweeps coin winnings. In his veto, Stitt wrote: “This bill is so broad that it criminalizes everyday apps people use for fun.”
The Lines describes Oklahoma as the third state to ban sweepstakes casinos in 2026, after Indiana & Maine, & says they are now prohibited in 18 states. Casino.org separately reports that California, Connecticut, Montana, Nevada & New Jersey have passed legislation outlawing sweepstakes casinos.
Questions
What is the difference between Gold Coins & Sweeps Coins?
Gold Coins are described by The Lines as “strictly for fun”. Sweeps coins can be redeemed for cash or prizes such as Amazon gift cards, according to New York’s Attorney General.
Why do operators say sweepstakes casinos are not gambling?
In the US, lawful sweepstakes are expected to be free to enter, & the FTC says it is illegal to make people pay to enter or improve their odds. VGW argued in New York that its sweeps coins were provided for free.
Does New York treat sweepstakes casinos as gambling?
Yes. The Attorney General says betting cash-redeemable virtual coins on games of chance is gambling under state law, however the operator says players obtain the coins, & Governor Hochul signed a formal ban in December 2025.
Can I still play with Gold Coins in Oklahoma?
According to The Lines, SB 1589 bans only the sweepstakes coin side, so operators offering only Gold Coin play may continue. The Lines reports that sweepstakes operations must stop by 1 November.
Do players see sweepstakes casinos as gambling?
An AGA-commissioned survey of 2,250 players in June 2025 found consumers “overwhelmingly view these platforms as gambling”, according to the association.
Sources
Sources checked 10 October 2026. Information only. 18+.
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