
Sweepstakes casinos provide players with something unique and different than that of traditional real-money gambling sites. There are varying rules and policies that players and operators are meant to abide by. The prime rule is, that players don’t have to pay real money for engaging with the casino-style games, but they can still win some form of cash prizes upon winning.
If you are planning on starting your sweepstakes casino business, understanding how the model works and what it takes to get started, will be an advantage in this competitive sector. So, this article will help you give a brief insight into the sweepstakes casino business model. Read along till the end to get yourself a good start in this line of business.
Concept of Sweepstakes Casinos
A sweepstakes online casino combines the concept of traditional casinos and social gaming. Players who will be visiting the sweepstakes casino website will gain access to games that resemble the ones available across real-money casinos. For instance, players can enjoy slots, poker, roulette, blackjack, and other such games, just like the ones across the traditional casinos.
In real-money casinos, the players are requested to make an initial deposit to be able to wager on their favorite games. But with sweepstakes casinos, this is not the case! Here, players will be provided with gold coins or sweep coins for entering and playing the game sessions. These coins are virtual currencies that are offered to players without the need to make any upfront payments.
Such virtual currencies are the only assets that players can use for playing sweepstakes casino games. Even though there is no mandatory requirement for players to pay upfront for playing sweepstakes games, they can still purchase additional virtual currencies through in-app offers. It is completely a free-will purchase requirement, based on players’ own decisions.
Following that, the sweep coins provided within the sweepstakes casinos can also be exchanged for real cash prizes. For obvious reasons, the amount of the prize might not be as high as what people get across real-money casinos, but it is still an attraction factor. It is because, players don’t need to invest a penny, but they still get to secure real cash prizes by just playing and winning the sweepstakes casino games.
Regulations Around Sweepstakes Casinos
As you know, the online gambling sector is highly regulated across all countries, including real-money and sweepstakes casinos. Considering sweepstakes in specific, it is legal in most countries and sub-regions when compared to real-money casinos. The obvious reason is the risk factor involved in the operations of the latter!
Sweepstakes casinos in most countries are considered promotional gambling, which is different from the agenda of traditional online casinos. Therefore, operating a sweepstakes gambling site is easier on a global scale, compared to the real-money counterparts.
The in-app purchases might be optional, but it is still a revenue stream for the sweepstakes casinos. Therefore, in order to make players more enticed about the risk-free sweepstakes gaming, operators give our free cash prizes in exchange for sweep coins.
Revenue Model for Businesses with Respect to Sweepstakes Casino Model
As there is an evident difference between the payment systems of sweepstakes and regular online casinos, the former can’t make an equal amount of profits as that of the latter. In traditional casinos, players place their bets using real money, which allows the operators to generate a substantial amount of revenue from their losses. On the other hand, sweepstakes casinos do not encourage upfront payments for game accessibility, which makes their profit flow inconsistent.
Therefore, the revenue streams for sweepstakes casinos are somehow different from those of the traditional online casinos, which include:
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Virtual Currency Purchase
Sweepstakes casinos offer various bonuses, rewards, welcome offers, and promotions in order to provide ample virtual currencies to the players. It allows them to get along with playing the sweepstakes games and fulfilling their thrill & excitement. But. There might be a situation where players continue to lose for several rounds and lose all their gold or sweep coins. In that case, they can go ahead and buy additional virtual currencies from the in-app purchase store.
The customized coin packages can act as an ideal revenue stream for the sweepstakes casino businesses. It helps players keep up with their uninterrupted gameplay sessions, while the operators will have a good revenue stream to accumulate some profits. These in-app purchase stores don’t just sell coins, but several other related things as well. For instance, players can buy merchandise, character avatars, and others.
2. Advertisements and Sponsors
The next big source of revenue for the sweepstakes casinos includes sponsorships, ad programs, and affiliate partnerships. As a sweepstakes casino business, you can collaborate with other brands and show their ads on your platform. It will help your sweepstakes casino business generate revenue from those ad placements every time someone clicks on them.
It is a widespread revenue stream for sweepstakes casinos and other platforms that offer free gaming services. The idea is to scale your brand presence, and earn from the clicks that the third-party brand ads get on your platform. These ads will be asking players on your platform to interact with those ads in exchange for some benefits with the sweepstakes casino games they play on your platform. Thus, good revenue can be generated in the process.
Payout Systems Defined for the Sweepstakes Casino Business Model
Sweepstakes casinos enable players to win either virtual currencies or real-money prizes upon winning games. But still, these casinos need to maintain their flow of revenue while keeping their customers loyal to the brand. Therefore, some of the seamless and interesting sweepstakes casino payout options that this business model prioritizes are:
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Payouts as Virtual Currencies
Every time players win a particular game, they will receive virtual currencies as a reward that they can further use to play other rounds or explore other games. Even with the gold coins, players can exchange them in order to avail of certain offers or select items from the brand store. Gold coins hold no real-money value, which means cash prizes can’t be redeemed using them.
Sweep coin is yet another type of virtual currency that is rewarded to players upon winning some exclusive games within the sweepstakes casino platform. These coins hold some special value and can be exchanged for real cash prizes or specific gift cards. In short, these rewards will be of real-life value for the players. As a sweepstakes casino operator, you can adjust the conversion rate of sweep coins into real money to ensure you don’t lose more than what you gain.
This payout option eventually provides sweepstakes casinos with a way to keep their players entertained while maintaining a subtle revenue flow for the business.
2. Prizes or Rewards
Some game-winning rewards can be different than virtual currencies in sweepstakes casinos. It means, that upon winning some specific sweepstakes games, casinos can offer some tangible items to the players. Such prize payouts are considered attractive in order to keep the players engaged. If you are adopting this payout option, be assured to find a long-term way to balance out the virtual currency spending of players for those tangible items.
As a sweepstakes casino, when you offer prize payouts, it usually balances out the non-payment of entry fees by players. With seamless calculations, you will be able to offer competitive items as payouts or rewards to the customers, while still being able to keep the income steady.
Parting Words
These are the few attributes that build the entire sweepstakes casino business model. If you are new to the iGaming industry and are willing to start slow with a sweepstakes business, understanding these model attributes is very important. All you need to do is, partner with the best sweepstakes casino software development company, and get experts’ advice on how to kickstart your business in this competitive sector.