Product
Dual-Currency Model
Definition
The dual-currency model is the structure used by US sweepstakes casinos, in which players use two virtual currencies: one that can be bought and is used only for entertainment play, commonly called Gold Coins, and a promotional currency, commonly called Sweeps Coins, that is given away and can be redeemed for cash or prizes once played through. Operators sell Gold Coin packages and include Sweeps Coins as a free bonus with purchases, alongside free routes such as postal requests and daily log-in bonuses.
The model is designed so that no one pays directly to play for a prize, which operators argue keeps the product outside gambling law. California's AB 831, in force from 1 January 2026, defines a dual-currency system as one allowing play with both purchased and free promotional currency exchangeable for prizes, and bans online sweepstakes games that use one. New York enacted a similar ban in December 2025.
Key takeaways
- Sweepstakes casinos use two currencies: purchasable coins for play only and free promotional coins redeemable for prizes.
- Redeemable coins arrive mostly as bonuses with coin purchases, plus free routes such as postal requests.
- Operators argue that because redeemable coins are free, the product involves no payment to gamble.
- California and New York now ban online sweepstakes games built on a dual-currency system, and liability can extend to suppliers.
Worked example
An illustrative purchase, not any specific operator's offer.
- A player buys a Gold Coin package for 20 dollars. The package includes 20 Sweeps Coins described as a free bonus.
- Gold Coins can be played on casino-style games but never redeemed.
- Sweeps Coins are played on the same games. Any Sweeps Coins won, once played through at least once, can be redeemed at 1 Sweeps Coin = 1 dollar, subject to a minimum redemption and identity checks.
The New York Attorney General's 2026 settlement described players receiving roughly one Sweeps Coin per dollar spent. That ratio is why regulators argue the purchase is, in substance, buying redeemable play.
Why it matters
The dual-currency model is what separates a sweepstakes casino from a social casino, whose single virtual currency can never be redeemed. That one redeemable currency turns an entertainment product into one with cash prizes, and it is the feature legislators have now targeted.
The commercial consequences reach the whole supply chain. California's AB 831 makes it unlawful to operate or offer an online sweepstakes game and prohibits payment processors, financial institutions and others from knowingly and wilfully supporting one, so game studios, aggregators, payment providers and marketing partners must decide where they can still work. New York's attorney general sent cease-and-desist letters in June 2025, the governor signed a statutory ban in December 2025, and the office announced an 8 million dollar settlement with a leading operator in September 2026.
For investors and suppliers, revenue concentrated in a dual-currency business carries state-by-state regulatory risk that differs from a licensed market, where the rules are set in advance. The legal argument rests on the AMOE, the free entry route, and on wider sweepstakes law, both covered in the sweepstakes and social casino course.
Dual-Currency Model vs Social Casino
| Dual-Currency Model | Social Casino |
|---|---|
| Two currencies, one of which (Sweeps Coins) can be redeemed for cash or prizes. The legal position depends on sweepstakes law and the free entry route. | One virtual currency that is bought and played but can never be redeemed for money or prizes. Revenue comes purely from coin sales. |
Redemption is the line regulators care about. Several sweepstakes bans exempt pure social casino play, so operators facing bans often fall back to a single-currency model.
The bottom line
The dual-currency model pairs a purchasable play-only currency with a free, redeemable one, and it is the defining structure of US sweepstakes casinos. California and New York now ban it in online sweepstakes games, putting operators and their suppliers on notice.
Sources
- AB-831 Gambling: online sweepstakes games - California Legislative Information
- Attorney General James Secures 8 Million Dollars from Leading Operator of Illegal Online Sweepstakes Casinos - Office of the New York State Attorney General
Frequently asked questions
What is the difference between Gold Coins and Sweeps Coins?
In the dual-currency model, Gold Coins are bought by players and used only for entertainment play; they have no cash value and cannot be redeemed. Sweeps Coins are promotional coins given free, often as a bonus with Gold Coin purchases or through free entry routes, and winnings in Sweeps Coins can be redeemed for cash or prizes after meeting play-through and verification requirements.
Is the dual-currency model legal?
It depends on the state. Operators argue that because redeemable coins are free, players never pay to gamble, which keeps the product within sweepstakes law. California's AB 831, in force from 1 January 2026, and New York's December 2025 law ban online sweepstakes games built on dual-currency systems, and other states have acted through enforcement or legislation. Legal advice must be state specific.
Why do sweepstakes casinos use two currencies?
Two currencies let an operator sell something, entertainment coins, while giving away the currency that can win prizes. That separation supports the argument that the three elements of illegal gambling (prize, chance and payment) never occur together, because the coins that can win prizes are not purchased. Regulators who reject the model say the purchase and the free coins are, in practice, one transaction.
Which states ban dual-currency sweepstakes casinos?
California and New York both enacted statutory bans on online sweepstakes games using dual-currency systems in 2025, with California's taking effect on 1 January 2026. Several other states have passed their own laws or taken enforcement action, and the list continues to change. Check each state's current position on the iGaming Times regulatory map before launching or supplying a product.