Pragmatic Play just pulled the plug on US sweepstakes casinos, becoming the first major game supplier to completely exit the market. The Gibraltar-based provider confirmed this week that it will no longer license its games to sweepstakes operators in states where restrictions weren’t already in place.
The timing isn’t coincidental. This comes days after Los Angeles City Attorney Hydee Feldstein Soto filed a civil enforcement action against Stake.us, naming Pragmatic Play alongside Evolution, Hacksaw Gaming, and other suppliers as defendants. While Pragmatic wasn’t directly accused of illegal conduct, being named in the lawsuit clearly accelerated their decision.
The Domino Effect Begins
Pragmatic isn’t alone in heading for the exits. Evolution has already pulled its games from California sweepstakes platforms, and Hacksaw Gaming titles have disappeared from Stake.us. When you try accessing Pragmatic games on platforms like WOW Vegas or Pulsz Casino from California, you get error messages. Some sites have removed Pragmatic’s entire catalog from their California lobbies.
This is significant because Pragmatic Play games — particularly their slots like Sweet Bonanza and Gates of Olympus — consistently rank among the most played titles on sweepstakes platforms. Losing access to these games in California, the largest US state by population, leaves a massive hole in operators’ game libraries.
Online casino expert Mark Taylor from casinowhizz.com says “Pragmatic’s exit signals a fundamental shift in how game suppliers view regulatory risk in the US market. When a provider with licenses in 40+ jurisdictions decides the sweepstakes model is too risky, it tells you everything about where this sector is heading.”
California’s Legislative Pressure
The withdrawal coincides with California’s Assembly Bill 831 moving through the legislature. The bill passed the Senate Appropriations Committee unanimously and heads to a full floor vote. If enacted, it would explicitly criminalize supporting sweepstakes casinos without regulatory approval or a tribal-state compact.
The bill’s language is broad enough to potentially ensnare game suppliers, payment processors, and even marketing affiliates who “knowingly support directly or indirectly” sweepstakes operations. While the word “knowingly” was added to soften the bill, suppliers aren’t taking chances.
Assembly Bill 837 adds another layer of pressure, introducing fines ranging from $1,000 to $25,000 for operators running sweepstakes casinos. The California Senate must act on these bills by September 12, before the legislative session ends.
Strategic Repositioning or Compliance Necessity?
What makes Pragmatic’s exit particularly interesting is that they don’t currently operate in the regulated US iGaming market. This suggests the move might be strategic positioning for future opportunities rather than just compliance-driven.
By withdrawing now, Pragmatic creates a clean compliance record that could facilitate entry into regulated state markets. With only seven states currently offering legal online casinos (Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia), there’s significant room for expansion as more states consider legislation.
The regulated market offers partnerships with established operators like DraftKings and FanDuel — relationships that would be complicated if Pragmatic remained tied to the controversial sweepstakes model.
Industry Implications
Other suppliers are watching closely. Light & Wonder and Play’n GO have always avoided the sweepstakes market entirely. Play’n GO CEO Johan Törnqvist stated earlier this year that “Sweepstakes casinos do not operate inside a regulated framework and that’s not something we support.”
The pressure isn’t just coming from California. Connecticut, New Jersey, and Montana have already signed sweepstakes casino bans in 2025. Michigan and other states are considering similar legislation. The American Gaming Association research shows 90% of consumers recognize sweepstakes as gambling, undermining the social gaming defense.
For sweepstakes operators, losing major suppliers creates immediate problems. Players come for specific games, and when popular titles disappear, so do the players. Smaller suppliers might fill some gaps, but they lack the brand recognition and game quality that keeps players engaged.
What Happens Next?
For Pragmatic Play, the path forward seems clear: pursue licensing in regulated US markets. Their extensive portfolio and international reputation make them an attractive partner for licensed operators. The company already has the infrastructure and compliance experience from operating in 40+ regulated markets worldwide.
For sweepstakes casinos, the future looks increasingly uncertain. Without content from major suppliers, they’ll struggle to compete with regulated alternatives where available. The legal challenges are mounting, legislative walls are closing in, and now their supply chain is breaking down.
Some operators might pivot to become licensed operations in states where it’s possible. Others might focus on international markets or states without pending legislation. But the golden age of US sweepstakes casinos appears to be ending.
The Bigger Picture
This isn’t just about one supplier or one lawsuit. It’s about an entire gray-market sector facing its reckoning. Sweepstakes casinos exploited a legal loophole, offering what looks and feels like real-money gambling while claiming to be social gaming.
That distinction is crumbling under regulatory scrutiny. When major suppliers decide the risk isn’t worth the reward, it validates what critics have been saying: the sweepstakes model operates too close to the legal edge for comfort.
For players, this means fewer options in the short term but potentially more regulated, protected environments in the long term. For the industry, it’s another step toward comprehensive regulation rather than creative workarounds.
The question isn’t whether more suppliers will follow Pragmatic’s lead — it’s how quickly the exodus will accelerate. With California’s bills pending and more states considering action, September 2025 might be remembered as the beginning of the end for sweepstakes casinos in America.
