In a digital gaming world dominated by regulation, innovation has found a way to sidestep traditional restrictions. Enter sweepstakes casinos — online platforms that offer casino-style games without violating gambling laws. These sites allow users to play slots, blackjack, and other classic games using virtual currencies instead of real money, yet still provide chances to win real cash prizes.
While sweepstakes casinos may seem like a legal gray area, they have become a booming sub-sector of online gaming in the United States, particularly in states where real-money gambling remains prohibited. Even major players like DraftKings, FanDuel, and Underdog have begun experimenting with sweepstakes models to broaden their appeal to casual users and navigate around state betting bans.
Meanwhile, across the Atlantic, Portugal has emerged as a fertile ground for regulated gambling — yet it is also seeing rising interest in free-play models that mimic the U.S. sweepstakes trend. This convergence of regulation, innovation, and player demand raises critical questions: How are companies legally delivering real-money rewards without running afoul of gambling laws? And how sustainable is this model in a tightening regulatory environment?
What makes them legal?
At the core of sweepstakes casinos is a simple but clever workaround: players don’t bet with real money. Instead, they use two virtual currencies — Gold Coins (GC) and Sweeps Coins (SC). The former is strictly for entertainment value, while the latter can be used in promotional gameplay and, if successful, redeemed for real-world prizes such as cash or gift cards.
What makes this model legal in most U.S. states is the absence of what regulators call “consideration” — the act of wagering real money to win a prize based on chance. Because sweepstakes casinos offer free methods of obtaining SC (through daily logins, social media promotions, or mail-in offers), they claim to operate outside gambling statutes.
This approach satisfies a key legal requirement: no purchase is necessary to play or win. That said, the legality of sweepstakes casinos depends heavily on how well platforms separate the act of spending money from the opportunity to win — a distinction that’s increasingly under scrutiny by courts and regulators alike.
How It Works
Sweepstakes casinos rely on a dual-currency system to maintain legal compliance:
- Gold Coins (GC): These coins are used for casual play and hold no real monetary value. They are typically distributed freely and can also be “purchased” in large bundles. GC is essentially the entertainment layer of the platform.
- Sweeps Coins (SC): These are the key to earning real rewards. SC can be acquired for free through promotional offers, daily bonuses, or mailing in a request. However, players often receive bonus SC when purchasing GC packages — a practice that walks the legal tightrope.
This model offers the illusion of purchasing entertainment (GC) while granting SC as a "free bonus," allowing the platform to claim that players never paid directly for a chance to win. Once accumulated, SC can be wagered on games. If successful, the winnings are redeemable — often on a 1:1 basis — for actual money.
It’s a clever system, but it’s not without controversy. Critics argue that the 1:1 conversion rate between real dollars spent and SC received (as part of GC packages) effectively mirrors gambling, raising questions about whether this system truly removes “consideration” from the equation.
From opportunity to controversy
Sweepstakes casinos are technically legal in 46 U.S. states. Only Washington, Michigan, and Montana have explicitly banned the format (with Montana’s ban set to take effect in late 2025). Idaho is also a special case — players can engage with Gold Coins but are prohibited from redeeming Sweeps Coins for cash.
The reason this model thrives is because U.S. gambling laws, both state and federal, typically define gambling as an activity involving three elements:
- Prize
- Chance
- Consideration (payment)
By removing the third element (or cleverly disguising it), sweepstakes casinos operate in a legal gray zone. Most offer “free” entry options, such as mail-in forms or daily login bonuses, to legally distance themselves from being considered gambling entities. Some regulators accept this distinction, while others — particularly in states like New York, Connecticut, and Nevada — are growing increasingly skeptical.
Recent legal challenges, such as cease-and-desist letters in New York and lawsuits filed in California and Kentucky, show that the tide may be turning. The American Gaming Association (AGA) has called for tighter regulation, arguing that these platforms are exploiting loopholes and avoiding taxation, licensing, and responsible gaming standards that are mandatory for traditional gambling operators.
Despite these risks, the majority of U.S. states continue to allow sweepstakes casinos — and in many cases, they serve as the only legal alternative to traditional online casinos.
California, Texas, Georgia & more
Ironically, some of the biggest sweepstakes casino markets in the U.S. are states where real-money online gambling is completely illegal. California, Texas, and Georgia stand out as hotspots.
- California has yet to legalize any form of online gambling, largely due to political resistance from tribal casino interests. However, sweepstakes platforms like us and Chumba Casino continue to operate freely, offering Golden State residents an outlet for digital casino-style games.
- Texas, known for its conservative stance on gambling, has no regulated online betting of any kind. Yet, the sweepstakes model is flourishing — largely because local legislation has not caught up with this growing trend. Platforms here are careful to avoid any terminology that implies betting, instead focusing on entertainment and free play.
- Georgia, one of the strictest anti-gambling states in the nation, allows lottery tickets and charity raffles but bans virtually all other forms of gaming. Surprisingly, sweepstakes casinos are not only legal here, but also popular — again, because they meet the letter of the law while skirting its spirit.
These states are perfect examples of how sweepstakes platforms reach players in legally restrictive environments — serving as a “social casino” workaround in regions that prohibit real-money gambling.
How DraftKings, FanDuel, and Underdog are leveraging sweepstakes models
The surge of interest in sweepstakes hasn’t been limited to niche operators — major gaming and sports platforms are jumping in, too. Companies like DraftKings, FanDuel, and Underdog Fantasy have begun incorporating sweepstakes mechanics into their broader user engagement strategies, especially in states where sports betting remains off-limits.
For example:
- DraftKings has run sweepstakes-style promotions tied to their fantasy contests, offering players entries to win cash or merchandise without requiring a deposit. These are especially common during national sports events like the Super Bowl or March Madness.
- FanDuel has experimented with free-to-play pools and bonus-entry contests, cleverly branded as sweepstakes, to attract casual sports fans who may not be interested in or legally permitted to bet.
- Underdog Fantasy, a rising force in the daily fantasy sports (DFS) space, utilizes sweepstakes drawings and leaderboard-based prize systems to grow its user base in restricted states. Its success shows how gamification and promotional language can convert app downloads into long-term users, all while technically avoiding the legal definition of gambling.
These companies aren’t just hedging their legal exposure — they’re also using sweepstakes as a low-friction user acquisition funnel. Casual players who would otherwise shy away from real-money gambling feel more comfortable participating in a promotional game, especially when no purchase is necessary.
In effect, the sweepstakes model has become a bridge between social gaming and regulated gambling, enabling brands to build loyalty and brand equity in markets that would otherwise be closed to them.
Engaging casual players through free-to-play mechanics
One of the greatest strengths of sweepstakes casinos is their ability to attract casual, non-traditional players — those who enjoy gaming but are either unwilling or unable to gamble real money.
Unlike traditional online casinos, which often require identity verification and a monetary deposit before gameplay begins, sweepstakes casinos simplify onboarding. Most offer daily login bonuses, free coin bundles, social media giveaways, and even mail-in entry options — all designed to draw in players with zero financial risk.
This free-to-play marketing model is powerful. It taps into behavioral triggers:
- Low barriers to entry (play immediately, no deposit needed)
- Gamified progression systems (leaderboards, achievements)
- Limited-time rewards that create urgency
- Referral bonuses, which promote viral growth
These elements mimic the addictiveness of mobile games while offering a compelling twist — the chance to redeem coins for real-world prizes. For players in states where online casinos are banned, this makes sweepstakes casinos a compelling hybrid: entertainment with real-world stakes, but none of the legal complications.
Top platforms with free currency offers
A major appeal of sweepstakes casinos lies in their generous no-cost entry options. Players can start spinning slots or playing table games without depositing real money, thanks to daily bonuses, social giveaways, and promotional bundles of Gold Coins and Sweeps Coins (SC). These offers allow users to experience the thrill of casino gameplay with the potential to redeem prizes — entirely for free.
Many of the leading platforms, such as Chumba, Stake.us, and Pulsz, provide ongoing incentives to keep players engaged. Newcomers are often surprised by how far they can progress without ever needing to make a purchase.
For those interested in exploring a wide range of these platforms, there are a lot of sweeps casinos with free SC that offer solid value and reputable experiences. This guide is an excellent resource for discovering which sites provide the best no-purchase-required opportunities.
With careful selection, players can maximize gameplay time and potential cash-outs — all while staying within the boundaries of a free-to-play model.
Portugal’s position: sweepstakes, social gaming, and regulatory ambiguity
In contrast to the patchwork legality of sweepstakes casinos in the United States, Portugal maintains a more centralized and regulated gaming market. Online gambling — including sports betting, poker, and casino games — is legal under the oversight of the Serviço de Regulação e Inspeção de Jogos (SRIJ).
However, the sweepstakes model has yet to gain significant traction in Portugal. That's not due to legal prohibition but rather because the country already allows real-money gaming under strict regulation. There's less consumer need for a workaround.
That said, social casinos — those with play-for-fun mechanics and no cash redemption — do operate in Portugal and are growing in popularity. These models are close cousins to U.S. sweepstakes casinos but lack the real-money prize element that defines the American model.
Interestingly, the Portuguese market could be fertile ground for sweepstakes casinos in the future. As international brands explore expansion beyond U.S. borders, Portugal presents a test case: a market familiar with iGaming but potentially open to new free-play, promotional formats — especially if paired with global sports campaigns or entertainment tie-ins.
With strong smartphone adoption, high mobile gaming engagement, and a regulatory framework that already accommodates innovation, Portugal may soon see an influx of hybrid sweepstakes-social platforms. The key will be how local regulators interpret the “no purchase necessary” clause — and whether the model is perceived as an entertainment product or a veiled form of gambling.
