Category: Articles

Sweeps VS Prediction Markets: Very Different PR and Political Moves

Something extremely interesting happened when Prediction Markets started to gain attention.

The timing and the enemies made were very different.

Sweepstakes casinos started from within the gaming industry. To this day, many GSPs serve both real-money iGaming operators as well and sweeps casinos.

Prediction markets, however, were very bold and ‘outsiders’ in a sense. The problem is prediction market operators have tried very dangerous waters: making enemies in traditional financial markets.

The financial markets have evolved from a start when stock exchanges were merely a way to finance and raise capital for companies, hundreds of years ago in Europe, to a playground of speculation and… bets.

Sweepstakes casinos tried their luck in a very well-defined gray area, and the ‘under-the-radar’ activity especially after the recent regulations (back at the time) of sports betting allowed a longer ‘easy start’ in my opinion.

Prediction markets, however, fired in a much more complex direction, including events that have potential ‘liquidity’ in traditional financial markets.

Certain ‘correct guessing’ situations could allow one to trade efficiently on the NYSE, Nasdaq, and even complex derivative markets.

The gaming industry surely is big, but the global financial markets are much bigger. And so is the lobbying and good legal protection.

Gaming industry veterans know how to spot an opportunity, seize it, and navigate complex PR waters much more naturally than how the stakeholders of prediction markets tried to do. 

In my opinion, the go to market was way too bold, and overly powerful enemies were made. Not to mention the possibility of allowing people with insider information in the political world to make an under-the-radar buck with a lot less scrutiny than on stock exchanges, for example.

Sometimes, expertise goes well beyond traditional verticals and products and translates as specific corporate experience, and the gaming industry is absolutely unique in this sense.

Mentioning Dollars and Euros: The Compliance Mortal Sin of Sweepstakes Operators

A few weeks ago, I was having coffee with a friend based in Malta. She has worked for years in the real-money iGaming industry and was starting to study the sweepstakes market.

She asked a very interesting question: “What would be the first thing you would explain to someone with real-money iGaming experience who is now learning about the American sweepstakes market?”

Well, apart from the basic concept that users must be granted an alternative method of entry—i.e., in practice, allowing them a chance to play for free—there is one key word that summarizes the difference between sweepstakes and real-money iGaming casinos: compliance.

The Wording Challenge: Forbidden Words and Eternal Vigilance at Sweepstakes Casinos

Essentially, it’s completely forbidden to mention real-money currencies such as dollars or euros.

Why? This derives from the usual legal opinions that sustain the sweepstakes market as a viable gray operation in America and elsewhere.

These legal understandings allow operators to market the product as something that is not legally an online casino and, therefore, does not require a traditional gaming license.

Special taxation and licensing have been discussed very frequently since the market’s inception.

So the first thing my real-money exec friends should know is that sweepstakes operators and platforms work hard to stay compliant.

Operators and platforms have an internal dictionary of what can and cannot be said on sweepstakes pages.

There should be no currency symbols whatsoever—like $, €, or £.

Although it might sound counterintuitive, these mistakes happen frequently and must be dealt with. But why is that the case?

How can the € Symbol Appear in an American Operator Involuntarily?

Well, a large portion of the GSPs serving American sweepstakes casinos are European, and the games converted to the sweepstakes market use special virtual token currencies to avoid mentioning real money.

Typical examples are FC and SC. The GSP and the operator then assign an internally-pegged value against real currency for invoicing purposes, but the game, is, technically, not displaying real-money references.

So any reference to the native currency of the game, whether it is EUR, GBP, or USD, must be removed completely.

Bugs, however, do happen, especially within the environment of complex operations like Game Providers.

The coding is no joke, especially when you consider the number of interconnected parties: aggregators, operators, and certification laboratories.

So staying compliant is extremely important for sweepstakes operators.

Legal Risks for Sweepstakes Operators:
America VS Real-Money iGaming in Europe

It is also important to bear in mind that the U.S. is a very different legal environment, and U.S. state jurisdictions are much more prone to litigation than most European countries, including governing bodies and legal entities like prosecutors’ offices and state attorneys general.

One small mistake can shut an operation down or result in enormous legal fees.

That said, the American sweepstakes market surely isn’t for the faint of heart.

Sweepstakes in America And The Real Money iGaming Community: B2B Similarities and Confusion

Welcome to Sweeptimes.com! After more than 3 years working with sweepstakes gambling, it was only natural to share something with my friends from the international iGaming community.

The most interesting thing about this time was discovering how niche our industry progressively becomes over time. New verticals create entirely new spin-off markets, as well as industry events, products and new teams formed globally.

It’s been a long time since it was just sports betting, basic online casinos, online poker and other traditional verticals.

But the industry isn’t just about convergences: sometimes leaders in our industry find impressive examples of how distant some B2B realities can be.

Not so long ago, when I was working at a sweepstakes platform, I had a call with someone from Europe, who was pitching the games of a studio.

I mentioned exactly what we did, what the Geo was, and incredibly, the business development manager somehow conveyed that they perfectly understood what we did, and that their games were ready to be integrated into a sweepstakes platform!

It was only when I received their deck that I understood that in spite of being very approachable, our chat had been just a pleasant conversation. The deck was absolutely about Real Money iGaming, with zero conversion in their portfolio.

That was a very illuminating conversation to me, as I understood how even senior business development managers, present in all the big industry events in Europe, sometimes are completely oblivious to basic product concepts of the sweepstakes market, in America and beyond.

After having worked with the American market for 3 years, and almost 19 years of career experience in markets as diverse as the UK, Brazil, LATAM, Spain and Italy, as an executive, Senior Content Writer and Consultant, I aim for Sweeptimes.com to be both a quality daily update for those focused on the sweepstakes market in America, as well as a cultural bridge to bring insights to colleagues native to the real money gaming market.

We’ll also analyze fresh and upcoming verticals like prediction markets and how they intersect with the fascinating sweepstakes gaming market.

Welcome to Sweeptimes.com!

Lucas Pasa Mondelo
Editor-in-Chief and CEO

Contact: lucas@mondelo.net
DM at LinkedIn: https://www.linkedin.com/in/lucas-pasa-mondelo/