Sweepstakes Casinos Vs. Real-Money Casinos: Pros & Cons
Table of Contents
- What Is A Sweepstakes Casino?
- Sweepstakes Coins: How They Work
- Pros & Cons of Sweepstakes Casino
- Pros & Cons of Real-Money Online Casino
- Comparing Sweepstakes Casino & Real-Money Casino As A Business Venture
- Develop One of the Best Online Sweepstakes Casinos with GammaSweep
- Frequently Asked Questions
Powered by the rapid growth of advanced technologies and seamless accessibility of online gambling platforms, the online iGaming industry is currently becoming one of the most popular forms of entertainment worldwide.
In this scenario, two distinct casino business models are online sweepstakes casinos and real-money online casinos.
While sweepstakes casinos share similar games and activities with traditional real money casinos, their operational models are completely different.
Wondering which business model to pick for your iGaming success? This blog will help you choose! We’ll compare the pros and cons of both so you can make an informed decision. Keep reading.
What Is A Sweepstakes Casino?
Another interesting fact about sweepstakes casinos is that, even though you don’t need to spend money on them, you can still win cash rewards. 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
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 as an alternative to real money gambling for betting or wagering purposes. Players have a choice to purchase gold coin packages in exchange for real money or wait a while to receive them as daily login bonuses, promotions, and social media giveaways.
Sweep Coins
Sweep Coins have a completely different role in sweepstakes casinos altogether. Sweep Coins cannot be purchased and must be won as winning rewards or bonuses. After collecting a certain amount of Sweep Coins, players can redeem them to win cash prizes, coupons, or merchandise.
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What is a Real-Money Online Casino?
Since real-money online casinos involve direct money wagering, these online platforms require special licenses and permissions to operate under a jurisdiction.
The most common and popular games and activities found in an online real-money casino are: slots, roulette, jackpot, blackjack, poker, dice games, table games, etc.
Pros & Cons Of Sweepstakes Casino
Pros of Sweepstakes Casino Platforms
Lenient Legal Compliance:
Compared with real-money traditional online casinos, sweepstakes platforms face fewer licensing hurdles, so setting up sweepstakes software and operating a sweepstakes platform is much easier.
No Purchase Necessary:
Sweepstakes casinos work on a ‘no purchase necessary’ model, so players don’t need to spend money to enter and play sweepstakes games. This allows operators to attract and onboard a broader user base who do not want the risk of real money gambling but want to enjoy the thrill of real money casinos. For a sweepstakes business, this allows them to attract and onboard more players.
Real-Value Rewards:
Although players don’t bet real money, they can win cash prizes. With Sweep Coins, users can redeem cash prizes along with other tangible rewards such as vouchers or merchandise.
Diverse Game Selection:
Top sweepstakes casino platforms often offer a wide variety of slot tournaments, table games, live dealer games, and casual mini-games, delivering the familiar online casino experience.
Social Mechanics:
Mechanism of social casino sites, such as leaderboards, live chat, VIP points, and other social features, boost retention, making your sweepstakes software popular.
Frequent Bonuses & Promotions:
New players can benefit from welcome bonuses, free coins, free spins, and ongoing promotional offers that attract players.
Cons of Sweepstakes Casino Platforms
Not Identical to Real-money Thrill
Since players use virtual currencies like Gold Coins and Sweeps Coins instead of direct real money bets, some players find the thrill less authentic.
Limited Redemption Options
Limited redemption options in exchange for sweep coins can frustrate users.
Risk of Overspending
Even with virtual currencies, in-app purchases, and aggressive promo mechanics, they can drive unintended spend. That’s why many sweepstakes casinos implement responsible gaming tools to encourage mindful play.
Withdrawal Thresholds & Processing
Many sweepstakes casinos have higher minimum coin balances for redeeming winnings or delays in processing, which may harm brand reputation and increase churn rate.
Pros & Cons of Real-Money Online Casino
Pros of Real-money Online Casinos
Real Cash Prizes
One of the major attractions of a traditional or online casino is real money wagering that allows players to win real cash prizes instantly.
Potential to Win Big
Compared to sweepstakes sites, real-money casino offers the chance to win a grand amount of real cash prizes.
Huge Variety of Games
Real money gambling casinos include a huge variety of games that keep players entertained for a long time, and don’t let boredom set in.
Bonuses & Promotions
Traditional online casinos often give generous welcome bonuses, free spins, demo modes, no-deposit offers, and loyalty programs to boost lifetime value.
Secure Transactions
Reputable operators support secure payments through various payment modes such as credit/debit cards, e-wallets, Apple Pay, etc. to encourage fast conversions.
Cons of Real-money Online Casinos
Financial Risk
Real-money play carries potential financial risk. Players can lose significant sums if they are not careful.
Addiction Risk
Ease of access and continuous play can raise gambling problems in individuals. Implementing responsible gambling tools can detect risky behavior and intervene at the right time.
Lack of Social Interaction
Many online sites lack the live social energy of land casinos; even live dealer games can’t fully replicate floor action.
Geographic & Regulatory Restrictions
Certain jurisdictions, such as Singapore, Japan, and Texas, ban online gambling. The licensing complexity also raises setup costs for operators.
Comparing Sweepstakes Casino & Real-Money Casino As A Business Venture
Legal & Regulatory Complications
Real-money traditional online casinos face complex, jurisdiction-specific gambling laws and must secure licences, making market entry slow and costly. By contrast, an online sweepstakes platform operates under sweepstakes laws and typically encounters far less licensing friction.
Setup & 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
Real-money casinos often generate higher gross revenue because of direct wagering. Sweepstakes platforms monetize differently, through gold coin sales, sponsorships, and 3rd party ad runs. Sweepstakes casinos deliver predictable, lower-risk average revenue and also serve as a powerful marketing funnel to paid gaming products.
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. Importantly, sweepstakes casinos can also act as a marketing funnel, converting casual players on your sweepstakes casino into customers for your real-money online casino.
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.
Develop One of the Best Online Sweepstakes Casinos with GammaSweep
