Playstudios (NASDAQ: MYPS), a social casino provider, announced that it is very close to launching its sweepstakes casino platform nationwide. After a testing phase, the product might be operational by the end of the year.
Following the end of US markets on Monday, the business announced its second-quarter results report, which included the sweeps casino update. CEO Andrew Pascal stated on a conference call with investors that the industry's "dominant theme" is the growth of social casinos that use sweepstakes techniques.
"After just nine months since formalizing this effort, we’re now live in open beta across seven states and the early signals are promising,” he said of his company’s sweepstakes casino efforts. “Player retention, engagement and monetization are all trending in the right direction.”
Pascal went on to say that the trend of players switching from the conventional social casino model to sweeps casino is significantly changing player behavior and revenue generation in the category.
“This trend is pressuring traditional offerings, including our core social casino portfolio. That said, these dynamics were anticipated, and they’re exactly why we launched our reinvention program last year,” he said.
Sweepstakes Casinos Are Getting More Notice
Although sweepstakes are one of the most contentious types of gambling and are subject to numerous state-level regulatory investigations, most bettors consider "sweeps" casinos to be legitimate gambling establishments where they deposit real money in the hopes of winning more.
According to a recent American Gaming Association (AGA) survey, 90% of participants believe that sweepstakes casinos are a type of gambling. A similar proportion stated that their main motivation for playing at these online venues is the possibility of winning money, and over two-thirds see these gaming sites as locations to bet real money.
Because some lawmakers doubt the free-to-play nature of these offerings and others fear that what is essentially another type of iGaming could pose a competitive threat to commercial and tribal gaming establishments that are located on land, sweepstakes casino operators have come under state-level regulatory scrutiny throughout the United States. Playstudios, for its part, is approaching what may prove to be a difficult regulatory environment with pragmatism.
“We’re seeing clear evidence that our proposition resonates with players,” Pascal said on a conference call with analysts. “We’re taking a measured and rigorous approach to scaling focused on ensuring that when we open the product to all eligible states, the experience is fully optimized and delivers on our high standards, player expectations, and return on ad spend thresholds.”
Odds and Ends of PlayStudios
In the June quarter, PlayStudios said that its direct-to-consumer business did well, generating $6.7 million in in-app purchase revenues, which represents a 107% year-over-year increase.
The business also stated that cost-cutting measures haven't been sufficient to make up for that shortcoming, and it is on track to miss full-year earnings before interest, taxes, depreciation, and amortization (EBITDA) and sales forecasts. According to executives, the current quarter is developing similarly to the second quarter.
Playstudios, the company that creates games like myVegas Blackjack and myVegas Slots, has its own reward program called playAwards. At MGM venues, including upscale establishments like Aria, Bellagio, and Mandalay Bay on the Las Vegas Strip, as well as several of the operator's smaller casinos, players can exchange those points for services and accommodations.