Investors tread carefully in sweepstakes amid perception and exit hurdles

Speaking at the Optimove ‘Finding the Sweeps-Spot Breakfast’ during G2E 2025, Matt Kaufman, Managing Director of Digital & Interactive at Eilers & Krejcik Gaming, described an investment environment defined by caution, limited liquidity, and shifting appetites across the sweeps-gaming ecosystem.

“The M&A environment has been kind of light,” Kaufman said. “It’s difficult to raise money at this point in time.” He attributed much of that difficulty to risk perception. “Potential investors are going to go online, they’re gonna Google [sweepstakes casinos,] and they’re gonna see, frankly, a lot of negative news.”

That narrative has dampened investor enthusiasm, but Kaufman noted several factors that can still attract capital: owning proprietary technology and content, which “inherently has lasting value,” and strong leadership teams. “People invest in people,” he said. “If you are the kind of person that deserves investment from other people, you should certainly put yourself front-forward with respect to your pitches.”

Beyond sentiment, the supply of potential investors is also constrained. “The opportunities at this point arguably outnumber the obvious investors,” Kaufman explained, pointing to gaming-focused funds and industry veterans who “already have the level of exposure to this market that they’re looking for” or are “conflicted relative to prior investments.”

For emerging operators, that means competition for capital is sharper than ever. Even established investors with gaming pedigrees are pulling back, waiting for a more defined regulatory outlook or evidence of sustainable returns. Kaufman said the result is a smaller pool of backers chasing fewer, but stronger, stories, where clear product defensibility and compliance credibility can help “overcome the negative narrative in media.”

Strategic buyers aren’t filling the gap either. “Operators from adjacent sectors have been choosing by and large to build instead of buy,” he said, with social-casino and iGaming incumbents leveraging in-house capabilities rather than acquisitions.

Exit uncertainty compounds the challenge. “Most investors in gaming aren’t looking for dividend machines,” Kaufman said. “They’re going to immediately ask at the beginning of a pitch: what is the exit opportunity? And there’s not a great answer for that.”

Few deals have materialized—the standout being ARB Interactive’s purchase of Publishers Clearing House for $7M, which Kaufman described as “primarily a play related to the database and the game content itself.”

Until clearer exits and perception shifts emerge, the sweeps-gaming sector may remain a market where, as Kaufman put it, “sellers point to their cash flow, and acquirers point to the news flow.”