Trouble Ahead? US Sweeps Industry Takes a Beating, Says Eilers & Krejcik

Eilers & Krejcik, a California-based research firm, is making a bold prediction on the US sweepstakes industry and its stakeholders. In a new report published this September 12th, the team confidently predicts what others are afraid to acknowledge: the sweepstakes casino industry has stalled, leading to diminished revenues across the board. 

Based on its extensive research, the team have revised its revenue estimate for 2025, from a high of $4.7 billion, to $4 billion. While its latest figure shows a decline of 17.5%, the estimated income for the sweepstakes casino industry still shows a +16% Y/Y. In short, industry insiders remain hopeful for the industry’s future direction, although there are a few hiccups along the way.

What’s Driving the Sweeps Casinos’ Revenues South?

In adjusting its revenue estimates, the research team has identified a few contributory factors. Here’s a rundown of the top reasons why there’s a slight slowdown in the collected revenues of top sweepstakes casino operators:

• Regulatory crackdowns and bans on sweepstakes casinos.  A few states, including California, New Jersey, and New York, have forwarded or finalizing their bans or strict restrictions on dual-currency sweep sites. California, for example, has approved its AB 831, which aims to completely ban these websites by January 2026.
• Lawsuits and tax claims. Some states, including Louisiana, have active cases and claims against operators for unpaid taxes. For example, VGW sites (which include Chumba Casino) have received complaints regarding unpaid taxes.
• Operator departures and a reduction in marketing spend. Some operators are pulling out in several states (most notably in New York), and there’s a substantial reduction in marketing spend in California and other states due to tightening regulations.

With these factors in play, the Eilers & Krejcik team sees it fit to adjust its projection on the US sweepstakes industry. In addition to a change in its 2025 projections, it also adjusted its outlook for CY2026, and now anticipates a decline of -10% Y/Y to $3.6 billion for its base case. 

The team further explained that this base case assumes that sweepstakes operators leave California and other states, and is partially offset by growth in other regulated or less restrictive states.

Quick Look at the Bear and the Bull Case for the US Sweeps Industry

Considering all these factors in play and their base case, the Eilers & Krejcik team sees a bear case of -30% for the US sweepstakes casino industry and +14% for its bull case.  In a business context, a bear case is a pessimistic scenario, that something may go wrong, while a bull is its opposite, suggesting that things will go well. 

And the team is betting on the likelihood that the bear scenario will happen, due to uncertainties in regulatory developments. Specifically, the research team aren’t confident that California’s AB 831 is now ready for Governor Newsom’s signature.

REFERENCES:

• Eilers & Krejcik Report
• SCGG Management