Social vs Sweepstakes Casinos – Discovering New Frontiers of Gambling

Author: Matthew Haynes

The gambling industry has many different aspects to it in terms of niches and verticals which have helped it to become one of the biggest in the world. Over the last decade, the sector has taken numerous sophisticated strides forward which has helped it to continue to satisfy the ever-changing intrigues of the market.

One of the biggest priorities over the last few years in the gambling industry is providing the ultimate in user experience, and as a result, we have seen many different and unique evolutions.

As a result, this has led to there being more of an emphasis placed on different ways to gamble and as such, casino gamification is one of the new micro-niches that is having an impact.

Two of the initiatives have come in the form of social and sweepstake casinos, both of which have started to make a dent in the industry and are gradually becoming more and more popular. Below, we investigate exactly the impact that these are having and how they compare.

What Is a Social Casino?

A social casino essentially mirrors that of social gaming, the types of games that you see on social media platforms like Facebook.

Over the last 15 years, social gaming has exploded, with games such as Farmville initially being the first to lead the revolution. As a result, the significant audience figures on Facebook easily provided the game's developers with enough of a user base.

Quite a few years later, after seeing the success of this type of gaming and the sheer potential, social casinos emerged in this form. What this did was allow interested parties to sign up and play games such as poker, roulette, blackjack and certain slots without needing to worry about wagering real money.

Inner Dynamics of This Type of Gaming Site

Social casinos operate in a fairly simple way and, in many ways, are a lot easier to understand than ordinary live online casinos, which makes the signup process for interested users all the more seamless.

One of the main stipulations for social casinos, though, is that players have to be over the age of 18 because these still have games that simulate a gambling environment despite no actual currency being exchanged in this particular way. As a result, because most of these can be found on social media platforms (particularly Facebook), any advertisements that market these social casinos need to target users over 18, which is specifically legislated.

The main aim of social casinos is to emphasize the focus on building a sense of community among players and even constructing mini-communities in the game, such as families or friendship groups.

It means that they can then enter into games against each other, with these very much being focused on the social side. As a result of this, Facebook proved to be the most natural advertising platform to attract users of this nature and gambling is still very much seen as an alluring form of entertainment.

When players sign up for a social casino, they find that most of them work on a freemium type model - similar to which the majority of social games are built on. While players can play for free, they may find they are limited by what they can do or how far they can progress at certain social casinos - each one has its own unique model.

Often, it is the case that players can buy a set of chips for a nominal fee (which is one way that the casino makes money), though in exchange, this unlocks extra levels or games for players who are keen to move further up the leaderboard, highlighting what is usually the competitive nature among friendship groups.

Of course, the ability to withdraw winnings is impossible; however, these are usually reflected in a certain amount of gold coins or tokens that indicate the success rate of a player among their peers.

How Do Social Casinos Make Money?

In addition to selling chips to users in exchange for unlocking further levels and/or games quickly, instead of over a certain period of time, for example, there are also numerous other ways that social casinos make money.

Of course, marketing and advertising is one way and often, players may notice in-game advertisements, which can appear in a number of ways.

Another revenue stream can be for social casinos to offer players to pay for an 'ad free' experience in order to provide them with a more seamless experience.

The most obvious way that a social casino makes money is often their end goal. Following the building of their brand and the collection of player data, if they have proven to be a major player, then a sale to a bigger company is usually the way forward. As the gambling industry continues to grow, the popularity of social casinos is likely to grow, and the data and technology can definitely be leveraged by big iGaming companies.

What Is a Sweepstake Casino?

Another breed of product that is leveraging progress in online innovation in the gambling industry is the sweepstake casino, which is really starting to make its mark.

These are essentially a crossover of traditional land-based casinos and crypto casinos (the latter, in their own right, are swiftly emerging). Literally put, sweepstake casinos allow gamblers to play gambling games while winning real money or cryptocurrency such as Bitcoin.

As a result, in order to play, users are required to purchase digital currency from sweepstake casinos, rather than buy casino credit, and through this loophole, they can then use this to play casino games.

Unique Rewards Systems and Virtual Currency

One of the main differentiators of sweepstake casinos is that these are set apart by how their rewards are defined. While the sites are in compliance with gambling regulation it doesn't necessarily mean that this is in the same way as normal online casinos - more that they have discovered loopholes.

This is demonstrated by the fact that players first have to buy virtual currency and are then entered into contests for sweepstakes. As such, these then provide the basis for rewards.

Players then use this virtual currency that they have purchased to play the casino games, and any winnings can then be converted back into FIAT (USD) currency and cashed out. These sweepstakes casinos operate in the US, where crypto gambling is legislatively complex. Being structured as a sweepstake, it means that this is not classified as gambling and this opens them up to a wider, potentially more interested audience.

At sweepstake casinos, players are able to select from different games such as poker, blackjack, slots, and roulette, in addition, to live dealer options, and the virtual currency model makes it more enticing due to the ability to compete for cash rewards.

Following the signup process, users are able to buy virtual currency packages, and these often consist of bonus entries into sweepstakes. As such, players are then provided with the opportunity to try out many different games.

Exploring the Popularity of Sweepstake Casinos

There are a number of reasons why sweepstake casinos have become popular over the last year, the main one being that they act as a loophole to still be able to gamble and end up with cash rewards as a legal, albeit more convoluted result.

Having a free-to-play option also completely eliminates any risk of losing the virtual currency that you bought, allowing players to try different games out without needing to make any purchases.

In addition and similarly to that of regular online gambling sites, sweepstake casinos run attractive promotions which can be enticing as a way of attracting new players and retaining existing ones. These could include additional virtual money, entry into more sweepstakes or being able to access exclusive games.

There is also the social aspect that some players find particularly appealing. In a similar way to social casinos allowing players to interact with each other during games, sweepstake gambling sites do the same in an attempt to try and replicate the excitement of traditional land-based casinos.

Assessing the Risks and Rewards

Of course, where there is any form of gambling simulation, there are bound to be some concerns. The fact is that sweepstake casinos can still be addictive - just like traditional land-based and online gambling sites.

In addition, there is also the worry about the regulation and how fair this particular niche is. Because some jurisdictions do not have regulations in place, it raises questions about the security of players' funds, so there is more of an emphasis on players choosing their sweepstake casino carefully.

What has also been brought to light is the fact that sweepstake casinos are still relatively new, which means that some only have a limited number of games available, raising concerns about the overall user experience.

The Future of Both Casino Types

It will certainly be interesting to see how both of these industry elements develop in the future. Social gaming has undoubtedly been around for a long time, proving its value, while social casinos have existed longer than sweepstake ones.

With gamification set to become one of the next big niches of the gambling industry, both of these products are essentially by-products. However, for those wishing to win real money in jurisdictions where gambling is still prohibited, we may see a considerable boom in sweepstake casinos.

However, one catch might be that players need to become more knowledgeable about digital currency and the risks involved if they choose to sign up for these. It is likely that social casinos will always provide a fun and less risky mode of gambling for those who do not wish to gamble real money, instead competing against other people.