Pragmatic Play, a major developer in the online gaming space, has formally announced it’s exit from the sweepstakes casino industry.
The creator of famous games such as Sweet Bonanza, Games Of Olymus, Wolf Gold, Sugar Rush, and hundreds more, Pragmatic Play’s decision to leave the space comes following the company’s involvement in a civil suit between sweepstakes casino operator Stake.us and the City of Los Angeles.
Stake.us vs. The City of Los Angeles
Brought by Los Angeles City Attorney Hydee Feldstein Soto, the class action lawsuit against Stake.us was filed on the grounds that the company is running an illegal gambling operation in California.
The lawsuit specifically named Pragmatic Play and other game suppliers, alleging they “aided and abetted” the illegal operation. The potential financial exposure for the companies involved could run into the hundreds of millions of dollars. Other major developers listed in the suit include:
- Pragmatic Play
- Evolution
- Big Time Gaming
- Red Tiger
- NetEnt
- No Limit City
- Hacksaw Gaming
Evolution gaming — whose subsidaries include Big Time, Red Tiger, NetEnt and No Limit City — has since ceased its operations in California, though they continue to supply games in other legal jurisdictions across the U.S.
Pragmatic Play’s Decision to Leave the U.S. Market
Pragmatic Play the first high-profile provider to completely withdraw from the lucrative but increasingly precarious sweepstakes casino vertical.
The company described the move as a response to “regulatory environments and evolving legisltation”.
A spokesman for the company said despite the discontuing of their operations in the U.S., they:
“remain committed to the highest standards of compliance and will continue to engage transparently with regulators.”
What is the Legality of Sweepstakes Casinos
For years, sweepstakes casinos have operated in a gray area of legality, using a “no-purchase necessary” loophole to offer casino-style games without being classified as traditional online gambling. Players on these platforms place wagers with a different type of currency, usually However, the regulatory tide is clearly turning. States like New Jersey, Montana, and Connecticut have already banned these operations, and a growing number of jurisdictions are considering similar legislation.
Pragmatic Play had a significant footprint in the sweepstakes market, with court documents revealing that its games accounted for a substantial portion of Stake.us’s content library.
What Does This Signal For the Sweeps Industry
The company’s departure is seen by some as a proactive step to align itself with a stricter compliance framework, and could also be a strategic pivot.
With an increasing number of states legalizing and regulating traditional iGaming, Pragmatic Play’s exit from the sweepstakes sector may signal its intention to pursue a more direct entry into the licensed US online casino market.
The regulatory scrutiny is also leading some companies to avoid the market altogether; for example, providers like Light & Wonder and Play’n GO have consistently opted out of the sweeps space.
As the legal landscape continues to evolve, Pragmatic Play’s preemptive exit could set a precedent for other suppliers, pushing the entire sweepstakes industry toward a critical inflection point. The long-term implications of these regulatory and legal pressures remain to be seen, but they undoubtedly signal a new and more challenging era for both sweepstakes casinos and the companies that power them.
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