ARB Interactive CEO Patrick Fechtmeyer: Sweepstakes Operators Chose Negotiation Over Litigation

ARB Interactive CEO Patrick Fechtmeyer says the sweepstakes casino industry has intentionally pursued negotiation and state-by-state engagement over the aggressive litigation strategy adopted by prediction market operators such as Kalshi, calling 2026 a “positive” time of change for the industry.

ARB Interactive operates the sweepstakes casino Modo and acquired Publishers Clearing House last year.

Fechtmeyer made the comments during a broader Q&A with Gambling Insider, which will be published later this week.

Fechtmeyer’s remarks come as Indiana, Maine, and Oklahoma have passed legislation targeting sweepstakes casinos this year. They follow six states that enacted sweepstakes-related restrictions in 2025. Additionally, similar measures in Tennessee and Louisiana are awaiting gubernatorial decisions.

Meanwhile, Iowa Gov. Kim Reynolds recently signed SF 2289, expanding regulators’ enforcement authority over illegal sweepstakes operators.

Why Sweepstakes Operators Haven’t Taken States to Court

Gambling Insider asked Fechtmeyer why sweepstakes operators have largely avoided challenging state enforcement actions in court, unlike prediction market operators.

Fechtmeyer argued that the two industries operate under fundamentally different legal structures. While prediction markets are subject to federal oversight, sweepstakes laws are primarily governed by state law.

I think that this is just a different strategy,” he said. “The sweepstakes industry has taken a different approach to regulation, trying to work with regulators and states and come to options rather than going straight to lawsuits.”

Prediction markets are under federal guidance,” he said. “So they’re simply fighting these state guidance issues.”

Fechtmeyer explained the sweepstakes industry instead has focused on engaging lawmakers individually across states rather than pursuing broad federal court fights:

The sweepstakes industry is trying to engage with lawmakers where they are and meet every state where they are. Many states have completely different needs.”

He contrasted that with the behavior of prediction market operators. He said they are “sitting on a federal level” and “simply don’t want to engage with the states.”

Fechtmeyer: 2026 a ‘Positive’ Inflection Point

Despite growing legislative pressure, Fechtmeyer believes 2026 represents a pivotal time for the sweepstakes industry.

I think that this year is definitely an inflection point…I would say that it’s an inflection point towards the positive side for the industry.”

Fechtmeyer pointed to the formation of the Social Gaming Leadership Alliance (SGLA) only last year. Since, ongoing discussions around modernization and regulation have shown signs that the industry’s engagement efforts are gaining traction.

We’re already seeing people starting to listen to our position,” he said.

He added he believes states will increasingly recognize “some of the potential that these games have [to] create a new category within the US that’s safe, most importantly, as well as fun for the users.”

SGLA Conversations Helped Slow Some Bans, Fechtmeyer Says

While several states advanced anti-sweepstakes legislation this year, bills failed in other states, including Florida, Massachusetts, Virginia, Minnesota, and Mississippi.

Fechtmeyer attributed some of those outcomes to increased industry engagement with lawmakers through the SGLA:

I definitely think that, as a result of SGLA conversations, that there have been bans that haven’t passed, for sure.”

Fechtmeyer has personally testified against sweepstakes ban bills in states including Minnesota and Indiana, arguing that lawmakers should modernize sweepstakes laws rather than push players toward offshore operators.