PlayStudio Exec Remains Bullish on Sweeptakes Casino Despite 25% Contraction

As sweepstakes casinos continue reeling from looming bans and inquiries, at least one industry executive has voiced optimism about the sector’s future. Andrew Pascal, CEO of Playstudios, sees a brighter path for sweepstakes casinos. During Playstudio’s Q3 2025 earnings call last November 4th, Pascal admitted that there’s still growth in the remaining open states, projecting a potential market valued at $3.5 billion to $4 billion. 

Pascal’s bullish statement comes at a time when analysts publicly stated that the industry’s TAM, or total addressable market, has shrunk by 25%.

Last October 11th, 2025, Governor Gavin Newsom signed AB 831, banning sweepstakes casino operations by next year. Other states have moved to ban or at least strictly regulate the sector, leading to its contraction.

Pascal Sees Growth in Open States, With Potential Revenues of Up to $4 Billion

During Playstudio’s third-quarter earnings call, Pascal noted the regulatory contraction in the sweepstakes sector, stating that the total addressable market (TAM) has shrunk by 25%. TAM, as cited by Playstudios, refers to the total addressable market on a net revenue basis- the operator’s hold after prize redemptions.

In the Q and A, Pascal mentioned the regulatory contraction, but added that “growth in the remaining open states remains strong with an addressable market of $3.5 billion to $4 billion”.

The shrinkage in revenue is largely attributed to states banning or strictly regulating the sweepstakes market, especially California, which accounts for roughly 20% of the total market size.

Pascal also talked about the prospects and plans of Playstudio, particularly the launch of its own sweeps brand, The Win Zone.

Launched this third quarter, The Win Zone is now live in at least 15 states, including Florida, Colorado, and Texas.

Why Gaming Execs Remain Bullish

Despite the ongoing regulatory inquiries and bans, several factors keep  industry execs optimistic:
Strong organic growth in open states. Around 35 to 40 states are still accessible to existing and aspiring operations, with a lower player acquisition cost. Also, younger players are shifting from pure social casinos to the sweeps model.

Dozens of new sites are still launching. Dozens of new platforms have launched in October/November, boasting impressive game libraries with 2,000+ games.

Changing forecasts still see a large market potential. Early 2025 projections see a market value of $4.7 to $5 billion in revenues. After bans and regulations, Eilers & Krejcik Gaming and other analysts have revised their projections to $4 billion, and another $3.6 billion in 2026.

Although the 25% contraction is painful, the remaining markets are growing fast, which opens opportunities to new and established operators.  Observers and analysts agree that the industry narrative today is that it is a “smaller pie, but operators are hungry and fighting for their share of a slice”.

REFERENCES

• AB 831
• Playstudio Q3 Earnings Call