Unlikely Alliances Emerge in the Battle Against Sweepstakes

In a development that seemed unthinkable just two years ago, U.S. representatives from Indian Country and the Sports Betting Alliance (SBA) met on October 23 to discuss uniting in the fight against sweepstakes gaming.

Victor Rocha hosted Jeremy Kudon, a lobbyist for the SBA—which includes major players like BetMGM, DraftKings, Fanatics, and FanDuel—to share insights on the sweepstakes phenomenon. Described as “unregulated, unlicensed, and untaxed,” sweepstakes gambling has surged over the past year. Rocha, currently conducting a five-part series on sweepstakes and pick’em-style fantasy contests, aims to inform California tribes on the matter.

Unlike traditional sports betting, sweepstakes allow consumers to engage without initially using real money. While sports betting and iGaming require players to fund accounts with cash or equivalents, sweepstakes often begin as free-to-play games, with options to purchase “coins” or “virtual cash” for wagering.

The legal gambling industry has started to notice the rapid growth of sweepstakes, recognizing it as a multibillion-dollar industry and seeking ways to curtail its spread. With sweepstakes operators being untaxed and unregulated, the panelists argued, both tribes and commercial operators are losing revenue, and states are missing potential tax income.

“With so much focus on companies like Underdog and PrizePicks, perhaps we overlooked the broader impact of sweepstakes,” Kudon remarked.

Kudon, who works with legal firm Orrick, noted that while he doesn’t represent sweepstakes operators, his firm does, including VGW, the company behind “Chumba.”