New Model for Changing Times
January 1 was a big date for sweepstakes casinos in California. It marked the day the state’s new ban on dual-currency sweepstakes gaming officially took effect.
It was also the day Modo Casino launched Modo Stars.
That timing wasn’t subtle. As many sweepstakes operators packed up and exited California, Modo chose a different path, by reworking its rewards system to keep players engaged while staying within the new law.
What Is Modo Stars?
Modo Stars is a new in-game rewards system meant to replace the sweepstakes features Modo previously used.
Under the new setup, players in California and other states will continue to play using Gold Coins, which are free-to-play and have always been positioned as entertainment-only. As players use those Gold Coins, they now earn Modo Stars, which work more like loyalty points than a gambling currency.
In an email sent to users, Modo described Stars as “our new in-game rewards you earn just by playing with Gold Coins,” adding that players will be able to redeem them for Gold Coin packages and other rewards as balances grow.
What Modo didn’t clearly say is just as important as what it did.
Why Modo Had to Change
California’s new law takes direct aim at the dual-currency sweepstakes model, the familiar setup that uses one currency for play and another that can be redeemed for cash prizes.
Under the statute, it’s illegal to “knowingly and willfully” operate or promote sweepstakes casinos that allow simulated gambling in exchange for cash, prizes, or cash equivalents.
Modo withdrew all Sweeps Coin activity in California on December 31, one day before the law took effect. As of January 1, California players have access only to Gold Coin play and the new Modo Stars system.
A Modo spokesperson said the company plans to “fully comply” with the legislation while continuing to operate a freemium, Gold Coin–only experience.
How Modo Stars Works
The mechanics are straightforward. Players use Gold Coins to play games, and simply by playing, they earn Modo Stars automatically.
Those Stars can be redeemed for Gold Coin packages and other rewards Modo hasn’t fully detailed yet. What they aren’t meant for is wagering. They don’t behave like a gambling currency, and there’s no indication they can be redeemed for cash
That distinction is central to how the system is designed.
The Sweepstakes Angle: What Changed
The biggest change here is in how the system is built.
Modo Stars moves away from the classic sweepstakes formula of chance, prize, and payment. There’s no second currency tied to cash-out play, and no explicit promise of cash rewards for spinning simulated casino games.
Instead, rewards are earned through free-to-play activity, closer to how a loyalty program works than a traditional sweepstakes. Play the games, earn points, unlock perks.
Whether that distinction is enough to satisfy regulators remains an open question. But it’s a deliberate shift away from the sweepstakes model that’s now under fire.
The Gray Area: Rewards Without Cash
One big question remains: what exactly are those “other rewards”?
California’s law doesn’t just prohibit cash prizes. It also bans games that offer prizes or awards tied to simulated gambling. That means even non-cash rewards could draw scrutiny, depending on how they’re structured.
Industry observers expect Modo Stars to be redeemed for experiences or perks; things like travel, entertainment, or merchandise, rather than straight cash. That approach copies loyalty systems used by social casinos and entertainment brands, and it’s generally a format regulators are more comfortable with.
For now, though, Modo hasn’t laid out the specifics.
Not Just a California Play
Modo Stars isn’t limited to California. The company says the system will go live in all states, including New York, which also recently enacted a ban on dual-currency sweepstakes gaming.
Modo already operates Gold Coin–only play in 16 states, and the rollout suggests the rewards system is intended to function across multiple regulatory environments.
Adapt or Exit
In 2025, six states, including California, New York, Connecticut, Montana, New Jersey, and Nevada, passed laws banning sweepstakes casinos. Many operators responded by exiting those markets altogether.
Modo took a different approach, opting to redesign its rewards system rather than withdraw from California. How regulators view that approach may influence whether similar models emerge elsewhere.
What to Watch Next
The real test for Modo Stars won’t be the launch itself, but what comes after.
It all depends on what rewards ultimately sit behind the system, how regulators interpret loyalty-style mechanics tied to simulated casino games, and whether other operators decide this model is worth copying, or too risky to try.
For now, Modo Stars stands as one of the clearest examples yet of how sweepstakes operators are responding to mounting pressure. January 1 may have closed the door on one model in California, but it also opened the door to a new experiment in how these platforms try to survive.
Blaise Luis
