Sweepstakes - How to Prepare and Launch Online Casino in the USA

The online casino market is growing rapidly. In 2018, this figure barely exceeded USD 25 billion, by the end of 2024 it had increased to USD 70 billion, and in 2028, it is expected to grow to USD 100 billion. An ordinary online casino generates approximately USD 3.7 million per year, while a well-promoted and popular one among players generates an average of USD 15 million.

The financial advantages of a gambling project are not limited to exclusively high potential earnings. A big plus of digital gambling platforms is their relatively modest budget requirements. Significant expenses will be needed only at the project launch stage - to obtain a license, purchase specialized software, hardware, services of technical specialists, and open a bank account.

But such expenses are one-time. The costs of maintaining the online casino are small. If the project organizers were able to interest active players, create a loyal community, and wisely invest money in marketing and advertising, the profit will be constant. Customers who like risk will stay with the gaming platform and bring new players. And this has almost nothing to do with exchange rate fluctuations, a possible deterioration in the economic situation or a reduction in income.

Difficulties with licensing

Such logical conclusions, fair in themselves, often fall apart due to one, but very serious problem - difficulties in obtaining a license for online gambling. It is not even a matter of the high cost of the permit - such expenses are included in the budget. Renewal of an already issued license requires significantly less costs.

The main problem is different - in the global trends of increasing transparency of financial flows, counteracting aggressive methods of tax optimization and combating money laundering. Several years ago, the business community faced the fact that all these innovations began to be legally enshrined in the legislation of countries that issue gambling licenses. New trends have greatly complicated obtaining permits for the gambling business, and the situation is only getting worse every year.

Most gambling platforms are interested in making a profit. The fact that they are not connected with the financing of Al-Qaeda or Hamas and do not “wash” dirty money for underground millionaires is no longer so important. Licensing rules have become much stricter - first in the European Union, then in other regions.

Fearing possible claims from international regulators, national commissions have radically increased the requirements for potential candidates. In order to obtain a permit in 2025, you need to not only own a transparent and 100% legal business. It is desirable to be almost a saint. Therefore, a company that wants to enter the gambling market will be studied under an electron microscope. And in the event of the slightest suspicion, a gambling license will be denied. Only the most persistent can complete such a quest to the end, which is why gambling operators are looking for alternative options.

Sweepstakes - a casino with prize draws

A working and legal solution was found quite quickly. It was the Sweepstakes format - a social casino with a totalizator that allows users to place bets. Its main advantage is the absence of strict conditions for the mandatory receipt of a gambling license. In fact, this means that standard corporate and financial requirements must be met to operate a casino. You can now forget about the problems associated with obtaining a permit to run a gambling business.

Significantly softer legislative regulation removes the problem of launching and initially setting up a project without reducing its profitability and prospects. Thus, in 2023, when the Sweepstakes format first appeared, the market volume was estimated at approximately $73 million, the forecast for 2032 is already $157 million. The dynamics of the key indicator for understanding the situation, CAGR (Compound Annual Growth Rate), is +11.5%.

An important advantage for businesses and investors is a temporarily relatively low level of competition. Online Sweepstakes casinos have not yet become a mass phenomenon; most players choose traditional gambling establishments. But this situation is temporary, consumers will “get a taste” of the format, and the absence of requirements for mandatory obtaining of a gambling license will attract business.

The main idea of Sweepstakes is a full experience and opportunities for players, but without the option to place bets directly. Online casino clients must first purchase special coins from the service provider, allowing them to play without restrictions and receive winnings. Clients receive a small number of tokens upon registration, so you can start using the service without any financial investment. Winnings can be exchanged at any time for traditional money (for example, direct transfer to a bank card), services or coins to continue playing.

Main advantages of Sweepstakes

The differences between online casinos and traditional gambling establishments are not as big as it may seem. The Sweepstakes format retains all the advantages of regular gambling centers, remaining interesting for players and profitable for operators. The business model, which was conceived as a compromise, eventually outlined a fundamentally new approach to gambling entertainment.

Some advantages of Sweepstakes casinos:

• complete legality without the need to obtain a special license for running a gambling business;
• a unique opportunity for customers to get a gaming experience without the risk of financial losses;
• easy to participate;
• a large gaming portfolio allows you to satisfy any wishes of customers without significant capital investments;
• expanded marketing opportunities;
• potentially unlimited customer base.

It should be noted that launching a gambling project based on Sweepstakes is significantly simplified, since the business is not actually bound by the choice of jurisdiction. In the case of a regular online casino, the situation is more complicated - there are not many countries left that issue special licenses. Problems often arise with opening a corporate account, since not all banks are ready to cooperate with non-resident high-risk businesses.

How to launch an online casino Sweepstakes

Many jurisdictions are suitable for registering an online casino operator company. If you are interested in a project with the highest possible prospects, you should consider the United States for launching. The laws regulating the gambling business in America are complex, and administrative requirements are often too high. As a result, few potentially promising projects “survive” before starting work. But if you remember that you will be registering not a regular casino, but Sweepstakes, the situation changes. And what previously seemed difficult and complicated will become, if not simple, then at least possible.

The main stages of the practical implementation of the Sweepstakes online casino project in the USA:

• Choosing a state. The legal status of this format can be different. In most American states, it is completely legal. Typical restrictions have almost no effect on the work - any demand for a purchase is unacceptable, it is necessary to provide full information about the game and the chances of winning, the client must be able to familiarize himself with the detailed rules. In some states (Florida, Louisiana, New York, Rhode Island) Sweepstakes casinos are legal, but with significant reservations. A complete ban on such a business exists only in Idaho and Washington. If you want to save on taxes, which can be very high in the USA, the Sweepstakes online casino must be registered in the offshore states of Wyoming or Delaware.
• Preparation and drafting of Legal Opinion. This is a special type of document confirming (in general) the compliance of a transaction or any legal action with US law. When launching a Sweepstakes project, the importance of Legal Opinion increases many times over, because with this document, risks are significantly reduced and the legal "weight" of the operating company is strengthened.
• Opening a corporate bank account. The task is no less difficult than licensing classic casinos. Gambling business is traditionally defined by banks as high-risk. The difficult situation is further complicated by the non-resident status of the company, which often puts an end to the prospects of the project. Therefore, to launch an online casino in the Sweepstakes format, it is better to open a corporate account not in the USA, but in Puerto Rico.

It is impossible to say that there may be problems at each of the stages. If you act without preliminary preparation and/or on your own, they will be there in any case. And with a high degree of probability, you will not be able to influence the situation in any way. Hence the conclusion: if you are trying to start a gambling business in the Sweepstakes format, careful preliminary preparation and assistance from an experienced expert from IT-OFFSHORE, who understands US corporate law, are a must.

Wyoming or Delaware?

The choice of state for registering an operator company is associated with finding the optimal solution with a given or desired balance of characteristics. The basic costs are approximately the same, the reputational status will be very high in any case. A commercial company registered in the United States is not the same as a legal entity opened in an offshore or Asian jurisdiction.

Advantages of Wyoming for launching an online casino:

• no key taxes: income tax (personal income tax), corporate tax, excise tax, sales and property tax, gross income tax and some others;
• very fast registration procedure — in most cases no more than 3 days;
• data on the company's shareholders is not disclosed, information on participants and business managers is not included in public registers;
• powerful mechanisms for protecting assets through LLC registration;
• soft corporate regulation rules (for example, there are no artificial restrictions on the number of shares issued, a single participant can hold all corporate positions, there are no requirements for minimum share capital, etc.);
• low annual expenses for maintaining the business;
• limited liability of directors and other company officers;
• it is possible to transfer the business to Wyoming while retaining the name and date of initial registration.

Advantages of Delaware for launching an online casino:

• Favorable tax climate. If a company with local registration conducts its business outside the state, it does not pay corporate income tax. Shareholders who live outside of Delaware can obtain tax exemption if certain conditions are met. There is no tax on investment income or interest on investments in fixed capital (at the state level). Personal property is also not taxed (or at a very low rate). Additional benefits come from having your own office in Delaware. There is no VAT or some other taxes standard in the USA.
• Stability and predictability. All legal disputes arising in the course of doing business in Delaware are resolved by a special Court of Chancery. The rejection of a verdict based on the jury's opinion, which is traditional in the USA, reduces the risks when considering complex cases that require a high level of competence from those who make the final decision.
• Favorable conditions for doing financial business. Delaware has usury laws that remove restrictions on interest accrual from banks.
• High level of confidentiality. Companies opened in Delaware may not publish personal information on shareholders (only data on the registered agent is indicated).
• Flexible corporate legislation. It is manifested in special rights for owners of preferred shares, the absence of conditions for mandatory residency status for key positions in the company, the seller's permission is not required.Accelerated registration procedure. All organizational actions for launching and setting up a business are most often completed in 1-3 days (excluding the time for opening a corporate bank account).
• Low operating costs. On average, they are a quarter lower than in other US states with a traditional tax system.

Opening a bank account

For companies operating in high-risk sectors, cooperation with a bank is often associated with significant difficulties. Problems arise not only at the stage of opening an account. For such a business, there is always a risk that any transaction may arouse suspicion in the compliance department. As a result, the account will be frozen until all the circumstances are clarified.

Therefore, finding a reliable financial partner is a very difficult task, often without a satisfactory working solution. The traditionally recommended pre-approval service (sending preliminary applications for opening an account to several banks at once) does not always save the situation. Therefore, promising and potentially profitable business projects in the high-risk sphere are often closed.

The way out of this situation is to open a corporate account in a reliable and proven bank in Puerto Rico. The procedure is completely remote, subject to careful preparation, the probability of refusal even for a high-risk business will be low.

Main advantages:

• Minimum application processing time - no more than 14 business days;
• Fundamental readiness to cooperate with companies operating in the hi-risk sphere;
• Full US financial license;
• The work of the financial and credit institution is regulated by the national law IFE act;
• The bank is a full member of the US Federal Reserve, SWIFT, SEPA, Union Pay;
• A large selection of services, including multi-currency accounts, corporate debit cards, support for e-commerce technologies.

The preparation stage cannot be excluded. Any bank, and not only in the US, is required to comply with KYC/AML principles, so you need to be understanding about the in-depth due diligence. Especially considering that all organizational procedures are carried out remotely, and your business schedule will not be disrupted.

Trends in the gambling industry

Launching a project based on the Sweepstakes principles is work for the future. Such a business requires serious preparation, calculation of development options, careful planning, and a stable source of funding. Therefore, you need to understand not only the current market situation, but also the conditions in which the online gambling industry will operate in the coming years.

Trends in the online gambling industry:

• Transfer of key storage and management stages to the cloud;
• Introduction of games with augmented and/or virtual reality;
• Growth of influence of artificial intelligence and machine learning technologies;
• Wide adoption of cryptocurrencies and additional functions based on them (smart contracts, payments in tokens, principles of provable fair play, etc.);
• Distribution of mobile games (optimization for relevant platforms is needed);
• Emergence of live games with a pronounced community influence and a special social atmosphere.

Conclusion, findings

Sweepstakes Casino is a working and completely legal option for launching an online gambling project that does not require special licensing. It is best to start such a business in the United States in one of the offshore states - Wyoming or Delaware, and open a corporate account in a jurisdiction friendly to high-risk and non-resident companies, for example, in Puerto Rico.

There are differences between a classic casino and Sweepstakes, and they are quite significant. But many players who are open to new experiences will want to try something special and unusual. Sweepstakes gives users the same sensations, excitement, and the opportunity to win a large sum. Therefore, having tried Sweepstakes once, many players consciously choose it over a classic online casino.

Sweepstakes is also very interesting for the gambling business. First of all, due to significantly lower corporate requirements. Sweepstakes casinos are exempt from the need to obtain a license, it is easier for them to open a bank account, and there is a lower level of administrative control.

IT-OFFSHORE offers a comprehensive turnkey solution that allows you to quickly launch a legal Sweepstakes entertainment portal in the USA. The package includes company registration in Wyoming or Delaware, Legal Opinion from a respected lawyer, and a clean corporate account in a Puerto Rico bank. IT-OFFSHORE specialists will work with you at all administrative stages, and support on an ongoing basis is possible after the actual launch of the Sweepstakes casino.