Online Sweepstakes Casinos Gain Ground in North Carolina’s Digital Economy

Sweepstakes casinos are digital platforms that have made waves in the past few years, with their popularity spurred by famous crypto-gambling brands creating ones that accept American gamblers. In short, these are sites that offer the same games as regular online casinos but use a virtual currency system that offers two types of on-platform coins – sweeps and gold ones. The latter facilitates prize redemption, while the former can only be used for playing games.

The reason many US states that do not allow traditional gaming websites permit the operation of these hubs is that they comply with sweepstakes laws, implementing no-purchase-necessary methods. These are ones similar to those Zynga apps implement, meaning they reward daily logins and supply virtual coins through promotional giveaways. Hence, in North Carolina, which has no real-money online casinos, sweepstakes hubs have boomed.

Legal Context in NC

The US has undergone a sports betting revolution since 2018, when the US Supreme Court repealed PASPA, allowing states to decide for themselves whether to permit wagering on sporting events. However, casino gaming over the Internet, permissible via the DOJ’s 2011 interpretation of the 1961 Interstate Wire Act, has not seen such wide adoption.

Thirty-two US states permit sports betting in 2025, but only seven authorize playing games of chance remotely for residents. North Carolina is not among them, despite passing an online sports betting bill in mid-2023, with the initial NC mobile sportsbook set to launch in March 2024.

Sweepstakes online casinos are legal because they are classified as promotional sweepstakes, and not gambling. They technically do not require players to wager real money to participate in the service they offer, and the Unlawful Internet Gambling Enforcement Act permits their functioning, federally, as long as no one has to mandatorily buy something to enter a contest where prizes are provided. The sites that accept North Carolinians comply with this, offering free play options, on-the-house daily bonuses, mail-in requests, and delivering coins via social media giveaways.

Historically, North Carolina has targeted physical sweepstakes parlors and video poker machines, with several laws passed in the second half of the 2000s, aimed at closing loopholes businesses exploited to offer such games. Yet, the online variety using the sweepstakes model has successfully evaded these restrictions by operating entirely digitally.

Growth & Economic Impact

As mentioned, sweepstakes gaming is expanding rapidly. This market is projected to generate revenues of $8.5 billion in 2024 and is estimated to grow at an annual rate of 8.9% over the next five years.

While those figures are impressive, most casino sweepstakes for Americans are not based in the US and have little to no effect on the American economy, federally and locally. Their operators function from offshore jurisdictions like Curacao or Anjouan, loosely regulated markets, with their US presence often being limited to a US-registered shell company, generally in Delaware or Nevada.

They create no jobs, as their teams work from headquarters or in offices in other countries, and they do not pay US taxes. Only players who redeem rewards of $600 or more on these sites are taxed by the IRS and sometimes by their state.

Player Behavior & Demographics

These websites are without question preferred by low-risk, casual game-of-chance enthusiasts. They cannot yield jackpot-like prizes. Hence, the modest rewards and decreased financial risk they offer bring in a more entertainment-oriented crowd, not individuals looking to make heaps of money from playing games. That broadens their demographic reach, attracting a diverse audience, including younger players who may not have access to regulated gambling markets.

That holds for North Carolina in particular, where the legal gambling age is twenty-one, but under federal laws, people eighteen or over can engage in sweepstakes gaming. That is a significant advantage, giving them a wider net to cast and lure in people with more disposable income willing to spend funds on fun activities. Furthermore, many believe that on account of their lower-risk nature, sweepstakes sites also attract a more balanced gender ratio, giving them a broader economic web as well.

Risks & Emerging Issues

These platforms can and do act as gateways for real-money gambling. The fact that they are operated by companies that run real-money or crypto-gaming sites should be evidence of that. They also lack oversight from the same regulators who watch over actual Internet gambling platforms or ones of similar quality. That raises concerns about game fairness, as well as consumer protections and accessibility to minors.

These websites are not subject to audits, mandatory responsible gaming measures, or the same marketing restrictions as online casinos. They, too, do not have adequate dispute resolution mechanisms, which is why multiple states have taken steps to ban them.

In North Carolina, regulatory efforts have primarily targeted physical sweepstakes parlors. But New York, Louisiana, Mississippi, and other US territories have aggressively opposed these social gaming hubs, something that has become somewhat of a trend across the nation.

Conclusion

Online sweepstakes casinos function in a semi-regulated growth space, available to all North Carolinians. It is unclear how long these websites will be allowed in the Tar Heel State. For now, they seem to be a good alternative for North Carolinians who crave real-money online casinos but cannot enjoy them because the state has not decided to take the iGaming plunge.