Sweeps Week
Sweeps Week
Sweepstakes gaming has exploded, and new competitors are entering the market. The World Poker Tour plans to launch a fully-formed online poker sweepstakes site in early 2025.
The Bulletin Board
NEWS: World Poker Tour launching new sweepstakes model online poker ClubWPT Gold in early 2025.
BEYOND the HEADLINE: Can anyone slow down the sweepstakes train?
LOOSE ENDS: CA tribes reform sports betting workgroup; DraftKings seeks Federal lobbyist; Chart of the Week.
NEWS: US Court of Appeals in DC sides with Kalshi, denies CFTC motion to stay in election betting case.
AROUND the WATERCOOLER: The SAFE Bet is a ubiquitous threat.
STRAY THOUGHTS: The GOAT.
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World Poker Tour Is the Latest Entry Into the Sweeps Space
The World Poker Tour has announced it will unveil a sweepstakes online poker site in early 2025 called ClubWPT Gold, an extension of its ClubWPT pseudo-sweepstakes site.
ClubWPT launched in 2008 as a free-to-play social online poker site that also possesses VIP monthly subscription tiers where the games have real-world prizes — a sweepstakes-lite model.
The soon-to-launch ClubWPT Gold will add a secondary Sweeps Coins currency, a familiar component in the current sweepstakes gaming world.
Per the WPT press release:
“ClubWPT Gold is a new online poker product operating on a sweepstakes-based platform, similar to ClubWPT, legally serving most of the U.S. ClubWPT Gold will allow members to play poker games against others by utilizing the platform’s Gold Coins, virtual coins with no monetary value. Sweeps Coins can be obtained through various promotional methods, including a free mode of entry, and may be redeemed for cash and prizes.”
Long the exclusive domain of VGW’s Global Poker, there is growing interest in the sweepstakes model within the poker world. The WPT is the first high-profile entry to date, but other recent arrivals include Stake.US and Clubs Poker.
Sweepstakes poker sites solve two problems that have hampered online poker in the US:
By operating under sweepstakes laws, they are ostensibly legal in 40 states plus Canada.
They can pool players across these jurisdictions, providing the sites with the needed player liquidity to offer games 24/7 and large guaranteed tournaments.
That second bullet point is extremely important. Unlike the online casino sector, where a sweepstakes operator doesn’t possess a structural advantage over a licensed online casino operator (beyond lower taxes and regulatory burdens), poker sites using the sweepstakes model have a massive edge over in-state licensed operators due to their national/international liquidity.
They are also building massive databases of online poker players in states that have yet to legalize online gambling.
Unsurprisingly, several states that offer legal online casino/poker games have sent cease-and-desist letters to sweepstakes operators: Michigan, Delaware, and Connecticut.
Beyond the Headline: Can Sweeps Overtake Social?
According to a recent Eilers & Krejcik Gaming (a newsletter sponsor) EKG Line newsletter, “The sweepstakes market is rapidly closing the gap with social casino, though it remains something like 40% of the size of the real money online casino market.”
EKG estimates the sweepstakes gaming market has grown at an 85% clip over the last four years. The firm expects the market to continue to grow over the next two years, “reaching $11.4bn in player purchases and $4.0bn in net revenue in 2025.”
One thing that could potentially slow the growth is the current regulatory scrutiny the sector faces.
In a recent episode of EKG’s Zero Latency podcast, Matt Kaufman, MD of digital and interactive gaming at EKG, said the increased scrutiny stems from the sweepstakes industry’s success.
It’s easy for existing operators to look at a “high-growth, similar product that is potentially having an impact on your business,” Kaufman said.
But as Kaufman said, even the AGA letter asking state regulators to investigate the legality of sweepstakes gaming providers lacks any specific charge and instead takes a “we don’t like you, leave” approach.
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Loose Ends: CA Tribes Reform Sports Betting Workgroup; DraftKings Seeks Federal Lobbyist; Chart of the Week
Tribal leaders reform sports betting workgroup: CNIGA Chairman James Siva told Play USA that tribal leaders have reformed a workgroup to draft a sports betting initiative for tribes to consider putting on the ballot in 2026 or 2028. “The goal of the workgroup is to create some type of a draft, whether it is for ’26 or ’28, that hopefully is capable of receiving mass tribal support,” Siva said. “We’re hoping to get out in front of this and work amongst tribes to have those difficult conversations and get to the point that we can start a draft.”
DraftKings on the hunt for a federal lobbyist: Some more potential fallout from the SAFE Bet Act, as Ryan Butler tweeted out this week: “DraftKings is hiring a Washington-based Senior Federal Government Affairs Director; position responsibilities include "building, maintaining and expanding DraftKings relationships with Congressional offices and executive branch agencies," per the job listing.”
Chart of the Week: This chart from the team at JMP Securities offers further proof that the “Challenger” brands I wrote about yesterday (Hard Rock, Bet365, Fanatics, and ESPN Bet) are closing the gap on the established Tier 2 operators of BetMGM and Caesars.
Court Sides With Kalshi in Election Betting Case
The US Court of Appeals for the DC Circuit has sided with Kalshi in its ongoing battle with the Commodity Futures Trading Commission (CFTC). On Wednesday, the Appeals Court denied the CFTC’s motion to stay (pending appeal) the earlier District Court ruling that opened the door to election betting in the US.
The court was sympathetic to the CFTC’s election integrity concerns but ultimately concluded, "The CFTC has given this court no concrete basis to conclude that event contracts would likely be a vehicle for such harms."
Kalshi plans to restart its election betting markets today:
This is good news for election-betting supporters, but several unanswered questions exist.
Will the CFTC continue to appeal the case?
Will Congress step in and write new laws banning election betting?
The second question should scare the s**t out of the sports betting industry, as it provides another avenue for federal action and yet another way for supporters to manifest SAFE Bet Act provisions into existence.
A large contingent of lawmakers has already been pushing for tighter regulations on election betting, and the decision could act as an accelerant.
“We strongly support the proposed rulemaking to prevent further corruption of our electoral system by moneyed interests,” the letter from a group of eight Democrat lawmakers to the CFTC reads. “Specifically, we support the Commission in finding that the outcome of a political contest, including an election, constitutes “gaming” and is, as such, contrary to the public interest and may not be listed on CFTC-regulated markets. Political event contracts do not serve the economic purpose of futures markets, and the Commission does not have the congressional mandate to regulate election and campaign activity.”
And recall that virtually every industry trade group — American Gaming Association, the Sports Betting Alliance, and iDEA Growth — expressed concerns the new regulations would overlap with sports betting.
In a comment to the CFTC, Attorney Jeff Ifrah, who heads iDEA Growth, wrote:
“We respectfully urge the Commission to reconsider its approach to event contracts involving sporting event outcomes and gaming more broadly… we advocate for a nuanced evaluation of each contract on its merits, taking into account the changed legal landscape, the demonstrated and declared hedging utility for industry participants, and the robust integrity monitoring systems already in place. By allowing CFTC-regulated event contracts, the Commission would empower the legal sports betting industry to better manage risks, compete more effectively with illegal and unregulated offshore operators, and ultimately better serve and protect American consumers and the public interest at large.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
I probably sound like a SAFE Bet Act alarmist (this is my third mention today), but the threat the legislation presents needs to be taken very seriously.
In addition to being tacked on to other legislation, I’ve also mentioned that the bill’s presence will shape legislation and regulation at the state level, and we are starting to get our first glimpse of that.
Stray Thoughts
I recently chatted with Sue Schneider, one of my favorite people in the industry. The podcast will be available to all on Saturday.
I’ve known Sue for years and owe a lot of my success in this industry to her. She has opened many doors and introduced me to too many people to count.
But I suspect anyone in Sue’s orbit has a similar story. She helps just to help, as her latest endeavor, Defy the Odds, a gambling industry startup launchpad, indicates.
During the podcast, we talk about Defy the Odds’ mission to bring new faces and ideas into the gambling sector and a lot more, including Sue offering a largely unknown person trying to make heads or tails of what was going on in the US online gambling space in 2014 a chance to speak on a conference panel.