As sweepstakes casinos increasingly come under fire across the United States, with many states considering outright bans, the Social Gaming Leadership Alliance (SGLA) is ramping up its campaign, calling on states to tax and regulate these platforms instead.
In its latest push, the SGLA is zeroing in on Pennsylvania and Virginia as its next priority states. On Monday, the trade group released two state-specific studies prepared by Eilers & Krejcik Gaming (EKG) that argue a formal regulatory framework would capture millions in untapped revenue while posing a “low likelihood” of cannibalizing the states’ existing gambling markets.
According to EKG estimates, regulated sweepstakes-style casino games, which the SGLA refers to as “social plus” gaming, could bring in more than $40 million a year for Pennsylvania and over $30 million annually for Virginia through a combination of registration fees and taxes on player purchases.
The report pushes back on a common argument used by opponents of sweepstakes casinos: that the platforms siphon revenue from regulated online casinos. The EKG analysis uses Michigan as a case study, noting that “data from Michigan strongly implies that Social Plus doesn’t have a material negative impact on online casinos.”
The model the SGLA proposes favors regulation, taxation, and registration over blanket bans that multiple states are seeking to impose on sweepstakes casinos.
Patrick Fechtmeyer, CEO of ARB Interactive, the company behind Modo Casino and Publishers Clearing House, has been outspoken about his desire to see sweepstakes gaming taxed and regulated.
During an interview with CasinoBeats on February 17, Fechtmeyer said he wants sweepstakes laws to reflect today’s digital reality:
“I’ve argued for this idea of modernizing sweepstakes laws. Sweepstakes laws were written a long time ago, before the internet age had ever come about, mainly for mailing stuff in and other promotions that don’t exist now with digital economies and digital tokens. All these things that just didn’t exist are not explicit in sweepstakes law, so it leaves room for a lot of interpretation.”
Economic Case for Regulating Sweepstakes Casinos in Two Key States
The EKG report uses data from Pennsylvania and Virginia to make the case for regulating and taxing sweepstakes gaming in those states. According to the reports, Pennsylvania accounted for an estimated $446 million in sweepstakes casino player purchases in 2025, while Virginia’s share was around $423 million. Those figures amount to roughly 3.6% and 3.4% of the U.S. market, respectively.
The study estimates that, in Pennsylvania, a state that already has a sales tax on digital goods, just collecting sales taxes could generate approximately $28 million a year at current market levels. When registration fees are added, total state revenue could exceed $40 million annually.
In Virginia, a similar strategy could bring in more than $30 million annually for the state while also giving regulators clearer authority to audit operators and enforce consumer protections. The SGLA, which represents operators of “social plus” casinos, commissioned the studies.
Cannibalization Concerns and the Michigan Data
Cannibalization of the regulated market is one of the biggest concerns opponents of sweepstakes casinos have voiced as they’ve sought to restrict or shut down these platforms.
The EKG report examined cannibalization, testing whether sweepstakes casinos indeed undercut regulated iGaming. It focused on Michigan, where most social plus platforms stopped operating in late 2023.
The study’s authors pointed out that “If Social Plus products were cannibalizing revenue from Michigan’s online casinos, their departure at the end of 2023 would theoretically give Michigan an advantage on other states when comparing the 2-year period before (2022/2023) to the 2-year period after (2024/2025) operator departures.”
However, in reality, the outcome was very different. The researchers found that, rather than boosting regulated casino growth, Michigan underperformed most other states with online casinos after sweepstakes platforms left the state.
The study concluded that the data “strongly implies a low likelihood” that social plus games meaningfully harm iGaming revenue. That finding will be a critical part of SGLA’s pitch as lawmakers in various states debate bills that would restrict or ban sweepstakes casinos.
Sweepstakes Industry Pushes Back Against Bans
The SGLA’s state-by-state strategy is similar to the arguments ARB Interactive CEO Fechtmeyer has made, asking lawmakers to regulate, not prohibit, the sweepstakes industry.
Speaking to CasinoBeats, Fechtmeyer warned that bans push players toward offshore operators and do nothing to curtail demand.
“It’s not really a question of, ‘We ban this industry, and it’s going to go away,’” he said. “It’s, ‘Where does that money shift to? How do you capture that?’”
Fechtmeyer is a strong proponent of the registration-and-tax model, which would give states a way to modernize outdated sweepstakes laws and implement consumer protections, such as age verification, geolocation, and anti-money laundering checks.
With Pennsylvania and Virginia now becoming the focus of the SGLA’s fight to preserve sweepstakes gaming, the trade group’s strategy appears to be one of testing whether detailed economic modeling, along with a regulation-first message, can change the political conversation from the current trend of outright bans to a framework where sweepstakes casinos are treated as a distinct, taxable digital gaming category.
The post SGLA Sets Sights on Pennsylvania and Virginia in Sweepstakes Casino Legalization Effort appeared first on CasinoBeats.
As sweepstakes casinos increasingly come under fire across the United States, with many states considering outright bans, the Social Gaming Leadership Alliance (SGLA) is ramping up its campaign, calling on states to tax and regulate these platforms instead. In its latest push, the SGLA is zeroing in on Pennsylvania and Virginia as its next priority
The post SGLA Sets Sights on Pennsylvania and Virginia in Sweepstakes Casino Legalization Effort appeared first on CasinoBeats.