Sweepstakes Casinos Seek Visibility Despite Regulatory Headwinds

This year’s Daytona 500 featured a sight impossible to overlook. The race featured two cars bearing the branding of sweepstakes casinos, marking a significant shift for an event long associated with traditional sponsors and regulated sportsbooks. For operators in the sector, the exposure represents more than a marketing win as their brands are becoming increasingly mainstream.

NASCAR Provides a Perfect Platform

Chumba Casino appeared on Tyler Reddick’s No. 45 car, which he drove for 23XI Racing, while Modo Casino appeared on Michael McDowell’s No. 71 Chevrolet, which he drove for Spire Motorsports. Sports betting companies such as DraftKings and Fanatics have appeared at the Great American Race before, but sweepstakes platforms had never enjoyed such a prominent placement in NASCAR.

Chumba’s parent company, VGW, established a closer partnership with 23XI Racing after its first season produced successful results. Meanwhile, Modo owner ARB Interactive expanded its footprint with Spire Motorsports for the current campaign. The partnerships enable sweepstakes casinos to connect with a wide network of dedicated supporters. NASCAR is popular nationwide, even in states where traditional online casinos remain illegal.

Broad reach remains vital for sweepstakes companies. Unlike licensed sportsbooks or iGaming platforms, sweepstakes casinos do not operate under state-by-state gaming approvals. Instead, they typically use dual virtual currencies, one for entertainment play and another that can be redeemed for cash prizes. While this system allows them to offer their services without obtaining individual state gambling licenses, the model is now facing mounting scrutiny.

Several States Have Taken Action Against Sweepstakes

In Illinois, regulators recently issued cease-and-desist letters to more than 60 online casino and sweepstakes operators, including Chumba and Modo. The state’s regulator warned that non-compliant companies could face civil or criminal penalties. New York and California have also taken steps to prohibit dual-currency sweepstakes casinos. Other states, such as Connecticut, Idaho, Montana, New Jersey, and Washington, have moved to ban or restrict them.

Many states share similar concerns, arguing that the ability to redeem certain virtual currencies for cash blurs the line between a promotional sweepstakes and an unlicensed online casino. According to a survey conducted by the American Gaming Association, most players were motivated by potential cash winnings, which also raises significant concerns regarding safe gambling practices.

Advertising restrictions are also tightening. Google has introduced policy changes that restrict social casino advertisements, making it harder for such companies to reach new customers. However, the Daytona 500 sponsorships demonstrate that the industry continues to operate despite adversity. Sweepstakes casinos are betting that brand recognition, fan engagement, and high-profile partnerships can help legitimize their businesses.