The Tide Is Shifting
For months, lawmakers and regulators have been chipping away at sweepstakes casinos. Now Wall Street is piling on. In a new note, financial giant Macquarie Group declared the “tide is shifting” against the industry, and when analysts say that, everyone listens, including investors.
Because when money walks, it hurts more than a cease-and-desist letter.
Why This Hits Different
Macquarie isn’t some blogger with a hot take, it’s a global investment bank that moves serious money. When they talk, operators, suppliers, and payment partners don’t just listen, they sweat.
And their verdict is that sweeps casinos aren’t just in a fight with regulators anymore. They’re up against entire industries, tribal gaming, land-based casinos, social gaming, and legal iGaming, all of which have bigger bankrolls and louder megaphones.
What Macquarie Actually Said
“Overall, the tide appears to be shifting slowly against sweepstakes gaming given a number of entrenched interests (legal iGaming, social casinos, commercial land-based, tribal gaming). Major markets such as California, New York and New Jersey, which account for ~20% of the US population, are passing laws to ban sweepstakes gaming.”
Translation: three of the biggest markets in America have already slammed the door. That’s not just a ripple, it’s a wave big enough to sink ships.
The Evidence Is Everywhere
- State bans: California, New Jersey, Connecticut, and Montana all outlawed sweeps in 2025, cutting off access in key markets. New York’s ban is waiting on Gov. Hochul’s signature—and if signed, it would make the Empire State the biggest domino yet.
- Population hit: Just these three markets: CA, NY, and NJ, account for nearly 20% of the U.S. population. That’s millions of potential players suddenly gone.
- Tax squeeze: Louisiana isn’t even debating legality, it’s hitting operators where it hurts. The state is suing VGW & WOW Vegas for $44M in unpaid sales taxes.
- Supplier exits: Big-name providers like Playtech, Pragmatic Play, and Evolution have pulled back, not wanting their reputations tangled in lawsuits.
- Operator pullouts: WOW Vegas quit Louisiana altogether, while VGW announced a full retreat from Canada.
For an industry built on finding loopholes, the walls are closing in fast.
How Operators Are Responding
So far, sweepstakes operators have been following one playbook: don’t fight, just flee. When a ban drops, they don’t call the lawyers, they call the movers.
At the same time, they’re working hard to polish their image by:
- Banding together under trade groups like the SGLA to push for regulation and taxes instead of outright bans.
- Proposing stronger KYC checks, faster redemptions, and shiny new “responsible gaming” promises.
But let’s be honest: lawmakers aren’t waiting around. While sweeps polish their press releases, statehouses keep passing bans, and the exits keep piling up.
Could Sweeps Pivot?
Macquarie floated a few possibilities:
- The DFS route: Daily fantasy sports operators took the pressure off by scrapping their controversial “pick’em” contests. Sweeps could try something similar to buy themselves some breathing room.
- The prediction market path: Some crypto-style markets go to court and fight bans head-on. So far, sweeps casinos haven’t shown the stomach for that fight.
- The problem: Sweeps live and die by the dual-currency system (Gold Coins for fun, Sweeps Coins for prizes). Strip that out, and you’re not just tweaking the model, you’re reinventing the whole thing. And that might not be survivable.
Why Investors Care
This fight isn’t just about regulation—it’s about returns.
- Operators lose revenue every time a state shuts the door.
- Suppliers want no part in lawsuits that could stain their brand.
- Payment processors risk getting dragged in if laws start holding them liable.
And here’s the craziest part: if Wall Street decides sweeps are fragile, investors won’t touch them, not even with a 10-foot pole. That kind of cash freeze can sink the industry long before lawmakers officially kill it.
The Outlook
Macquarie isn’t calling sweeps dead, but they’re far from bullish.
“Though we expect regulatory pressure will likely only increase, we believe the questions around sweepstakes gaming are far from being settled.”
The storm is here, but the ship hasn’t sunk… yet.
Bottom Line
State bans, lawsuits, and supplier exits had sweeps wobbling already. But when Wall Street calls time on the party, it’s no longer just politics, there’s money involved now. And in this business, losing investor confidence cuts deeper than any ban.
The gray zone that made sweeps thrive is disappearing fast. The only real question: can operators reinvent themselves before the tide pulls them under?
Blaise Luis
