• Playstudios remains optimistic about sweepstakes casinos
• The bullishness comes amid regulatory headwinds surrounding the controversial online games

The sweepstakes casino market hasn’t exactly been on a winning streak, as California passed a ban on the online games, and Google declassified sweeps as social casino games. Despite the regulatory setbacks, Playstudios remains bullish on the innovative offerings.

The Win Zone is the sweepstakes casino brand owned by Playstudios. The company led by gaming veteran Andrew Pascal remains bullish on sweepstakes despite recent regulatory setbacks. (Image: The Win Zone)

Andrew Pascal, a gaming industry veteran who is the nephew of Steve Wynn and who previously served as president and chief operating officer of Wynn Las Vegas, revealed Monday during his company’s third-quarter earnings call that he remains optimistic about the controversial sweepstakes space. Playstudios, the company he co-founded in 2011 with investments from MGM Resorts and Activision Blizzard, launched its sweepstakes casino, The Win Zone, during Q3.

The timing wasn’t ideal, as additional states passed laws and orders banning online casino games that use dual currencies. Pascal isn’t yet fazed.

While the broader sweepstakes market has faced regulatory contraction, reducing the TAM (total addressable market) by roughly 25%, growth in the remaining open states remains strong with an addressable market of $3.5 billion to $4 billion,” Pascal said. “We continue to believe the category represents a meaningful long-term opportunity.”

Pascal added that Playstudios has seen “steady improvements” in Win Zone retention, engagement, and monetization. That’s resulted in the company’s “highest returns on ad spend.”

The company’s social offerings include myVEGAS Slots, MGM Slots Live, myVEGAS Bingo, Pop! Slots, myVEGAS Blackjack, and Tetris. 

Sweepstakes Regulation

Critics of sweepstakes casinos claim the online platforms allow players to gamble for real money. Sweepstakes companies claim they do not, and that the digital currency that players can purchase — typically called sweeps coins — cannot be cashed out. However, they can be “redeemed” for cash prizes.

Numerous state attorneys general and state gaming regulators have issued cease-and-desist orders against sweepstakes casino operators. Playstudios’ Win Zone is available only in Alaska, Arkansas, Colorado, Florida, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, and Wisconsin.

Pascal acknowledged that the recent trend has bucked against sweepstakes, but he’s hopeful for continued market access in certain regions.

We hope that some form of sweepstakes is going to survive. There will undoubtedly be more jurisdictions that fall out, but there will be some jurisdictions that flip to being more fully regulated. I think there will be some form of oversight, regulation, and taxation of the sweepstakes market,” Pascal said.

“And that, to me, feels like a very real opportunity,” Pascal continued.

Tetris Building Blocks

Playstudios isn’t all-in on sweepstakes. Pascal is hedging his bet with the company’s November 2021 licensing rights to the iconic Tetris franchise. Tetris is among Playstudios’ most popular social gaming apps.

We have a sweepstakes alternative so we can keep people within our ecosystem as opposed to losing them altogether,” Pascal explained. “Hopefully, that will be somewhat stabilizing.”

Playstudios is in the early stages of rolling out Tetris Block Puzzle, a new Tetris experience that doesn’t work only from top down, but from all four sides of the gameplay field.  

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