Sweepstakes Casinos Vs. Real-Money Casinos: Pros & Cons
Table of Contents
In this situation, as a new business venturing into the world of casino, deciding on which business model to pick can be a complex task. This is why in this article, we’ll compare the pros and cons of both sweepstakes platforms and real-money casinos in order to help you make an informed decision. Keep reading.
What Is A Sweepstakes Casino?
Let us explain further.
Sweepstakes casinos work similarly to any other gaming website. However, the games that it includes are mostly casino-style games which involve betting or gambling. Again, here’s a twist! Your players don’t really need to spend real money on sweepstakes casinos in order to participate. Sweepstakes casinos run on virtual currencies, and that’s what your players use in order to play.
Another interesting fact about sweepstakes casinos is, even though you don’t need to spend money on it, you can still win rewards out of them which have real-life values. Let’s dig deeper into how it actually works.
Sweepstakes Coins: How They Work
Sweepstakes platforms operate on two types of virtual currencies- Gold Coins and Sweep Coins. When a player signs up for the first time, they receive a bunch of Gold Coins for free. They can use these Gold Coins to play different casino games on the platform. These sweepstakes coins are also used for betting or wagering purposes. If players run out of Gold Coins, players have a choice to purchase more in exchange for real money, or wait a while to receive them as bonuses.
Now, Sweep Coins have a completely different role in sweepstakes casinos altogether. Sweep Coins cannot be purchased, and must be won as rewards or bonuses by the players. After collecting a certain amount of Sweep Coins, players can redeem them to collect rewards and prizes with real-life values.
This is how a sweepstakes casino works.
Do You Want To Launch Your Sweepstakes Solution For The U.S. Market?
What Is A Real-Money Casino?
In order to enter an online real-money casino, a player needs to sign up and make a deposit with real money. This money will then be used for wagering. In a land-based casino too, players need to purchase casino chips in order to explore the various offerings of the casino. When the player wins money by playing different games, he can make a withdrawal or use the money to play more.
Since real-money casinos involve direct money wagering, these online or land-based platforms require special licenses and permissions to operate under a jurisdiction.
The most common and popular games and activities found in an online or land-based real-money casino are: slots, roulette, jackpot, blackjack, poker, dice games, table games, etc.
Pros & Cons Of Sweepstakes Casino
First, let’s understand the pros.
Lenient Legal Compliance:
Sweepstakes casinos, as compared to real-money casinos, are subjected to a more lenient and flexible legal compliance. This is because they don’t involve direct wagering of real money. Hence, sweepstakes casinos are more legally accessible and allowed in more jurisdictions where traditional casinos are banned.
From a business perspective, setting up a sweepstakes software and operating a sweepstakes casino is easier.
No Purchase Necessary:
One of the primary conditions for an online platform to be qualified as a ‘sweepstakes casino’ is that it must have a ‘no purchase necessary’ clause. This means that in order to enter and play at a sweepstakes casino, spending real money cannot be mandatory, and players must be allowed to play free of cost while signing up. Later on, they have the option to make an in-game purchase, but that’s completely optional and should depend on the player’s will.
For a sweepstakes business, this allows them to attract and onboard more players.
Real-Value Rewards:
Another advantage of a sweepstakes casino is that it offers real-value rewards in forms of cashback, coupons, discount vouchers, merchandise, etc. This excites the players because even without having to spend money, players can still win valuable rewards just by playing online at a sweepstakes casino.
For a business, this is good news because it helps to onboard and engage more players.
The cons of a sweepstakes casino are:
Limited Payout Potential
Although, in paper, sweepstakes platforms offer real-value rewards, however, when you compare it to real-money casinos, the potential for payout is considerably limited in a sweepstakes casino. Besides, players have to play for a long time in order to collect enough redeemable sweepstakes coins to be able to win the prizes.
From a business’s point-of-view, this might be off-putting and can cause players to abandon their journey midways.
Chances Of Addiction And Financial Risk:
Just like real-money casinos, sweepstakes casinos also pose threats of unhealthy gambling addiction. Besides, the in-game purchase option in an online casino sweepstakes software also causes financial risk for players who get addicted and make purchases beyond their budget or financial capabilities.
This can be a bad influence for businesses since these things cause a bad reputation in the market.
Pros & Cons Of Real-Money Casino
The Pros of a real-money casino are:
Real Cash Prizes
A traditional casino or an online casino involves real money-wagering, and allows players to win real cash prizes quickly and instantly. This is one of the major attractions of a casino. Players from all around the world come and try their luck in a casino in order to win.
For a casino business, this is good news as it attracts a lot of players.
Potential To Win Big
A real-money casino not only allows players to win real money, but the potential amount allowed to win is also huge, as compared to a sweepstakes casino. Events like progressive jackpots, high-stake tournaments etc. involve high-value prize money for players. Again, this is beneficial for a casino business since it helps them attract a lot of players.
Huge Variety Of Games
A real-money casino, both online and land-based, includes a huge variety of games that keep players entertained for a long time, and doesn’t let boredom set in.
This helps a casino business retain and engage players for a long duration of time.
The Cons involved in a real-money casino are:
Can Be Addictive And Financially Risky
Gambling can lead to a lot of behavioral problems in a player and can cause gambling addiction. This causes financial trouble, mental stress, social reputation damage, and a lot of serious consequences.
As a business, this can be damaging for both their profits and reputation.
Complicated Legal Compliance
Gambling is a social taboo in many countries and cultures. Besides, online and traditional gambling activities are completely banned in several jurisdictions. In other areas where gambling is allowed, it might involve complicated legal compliance that makes it difficult for businesses to set up a casino.
Comparing Sweepstakes Casino & Real-Money Casino As A Business Venture
Legal And Regulatory Complications
The legal requirements for a real-money casino are more complicated than those of a sweepstakes casino. Real-money casinos are banned in several countries, both online and offline. However, sweepstakes casinos are more acceptable legally worldwide. While real-money casinos require a gambling license, sweepstakes casinos don’t have such requirements. However, a sweepstakes casino must follow sweepstakes rules as specified under the jurisdiction of its operation.
Setup And Launch
Now let’s consider the initial set-up, launch, and day-to-day operations. An online sweepstakes casino software is usually less expensive than the development cost of a real-money casino. Besides, it’s faster to launch a sweepstakes casino, which requires a time frame of a few weeks to a couple of months. While for a real-money casino, the timeframe can take several months.
Revenue Potential
The revenue potential of a real-money casino is a lot higher than a sweepstakes software, which depends on in-game purchases of sweepstakes coins, i.e. virtual Gold Coins, sponsorships, and other indirect sources for income. A real-money casino always has a house edge that makes sure that the businesses always receive the heftier part of the money that’s wagered by players. This generates the most amount of money for it.
Verdict
After considering all these factors, it can be concluded that for a new business with limited resources, it is easier to set up a sweepstakes casino, while for an established business with enough resources, a real-money casino can be more profitable.
Key Takeaways
- The primary difference between sweepstakes casinos and real-money casinos is that sweepstakes casinos don’t involve real money-wagering, and they use virtual currencies for this purpose, while real currency is used in real-money casinos, as the name suggests.
- While sweepstakes casinos have a ‘no purchase necessary’ clause attached to them, in the case of real-money casinos, spending money is mandatory.
- From a business perspective, it is easier and more cost-effective to set up and operate a sweepstakes casino, and it is ideal for new businesses. While real-money casinos can be more profitable, they involve a complex and expensive setup process.
Set Up Your Own Online Sweepstakes Casino With GammaSweep
