The Question Nobody Is Asking About Digital Packs

Digital packs went from hobby to industry in a hurry, minting multimillion-dollar players of its own and attracting names like Fanatics, GameStop and Underdog to enter the space. While the debate over whether it's all just gambling rages on, there's a race to be the brand still standing eighteen months from now. How do ad platforms categorize digital packs? The answer to that big question, and how operators move in response, will decide who actually wins. No platform's ad policy names digital packs right now, so each one decides for itself what you are.

Now here's a look into where you stand across 15 ad platforms and app stores, plus three strategies to grow by reaching the right people while they make up their minds.

The Question That Is Being Asked

Is this gambling?

That's the question the headlines keep coming back to. A quick primer for anyone outside the hobby: a digital pack (also called a digital repack, or a rip) is a pack of real, often graded trading cards that you buy and open online. Think of it as ripping a pack without the foil, the wait at the mailbox or the shoebox under your bed. The cards sit in a vault until you have them shipped or sell them back to the platform.

In August 2026, Barron's reported on the topic. They bought a $50 pack containing a card with an estimated value of $20, and the platform offered $18 to buy it back. Barron's put it bluntly: some see "yet another instance of gambling taking over an American tradition." Even Josh Luber, who co-founded Fanatics' collectibles business, told Barron's, "Everyone's asking the question, 'Is regulation coming?'"

They're not the only ones asking. ESPN has asked whether box breaking is a lottery, and The Athletic has covered customers accusing Whatnot of running one through its breaks and repacks. In California, lawyers bringing claims against live-break platforms have dusted off a 1994 statute that treats resealed packs of sports cards as an illegal lottery. We haven't seen it tested against digital packs yet. However, a separate California law took effect in January 2026, banning the dual-currency sweepstakes model that lets players buy virtual coins and cash out winnings for money or prizes. It's the exact model some pack apps operate on.

I don't think the gambling question is going away, but it's also going to be settled by lawyers and arbitrators, and nothing I write will move it. What I can do is ask the questions that affect operators and help plan for whatever the decision is.

How Does An Ad Platform Know What You Are?

With all the noise about whether digital packs are gambling, how are ad platforms deciding who to show your ads to?

It may sound like a trick question, but it's actually a technical one that'll decide how you market your business. From what we've seen, nearly every digital-pack platform advertises on Meta, and the ones with apps can also buy installs through app networks like AppLovin and Unity. Each of those ad platforms has a rulebook for gambling, and the one thing they all have in common: none of them mention you.

Take Meta. Its gambling policy names sweepstakes, lotteries, raffles, fantasy sports and poker. An account needs Meta's authorization before it can advertise any of them. Digital packs, mystery boxes and collectibles aren't named.

The definition behind that list is broader, though. It covers anything where something of monetary value goes in and something of monetary value can come out, including prizes that can be sold for money on secondary markets. The same policy exempts prize promotions attached to a product sold at its usual retail price. A digital pack sits somewhere between those two lines, and the policy doesn't say which side. That call is made by Meta's review, which Meta says relies mostly on automated tools, reading your ads and the landing page they send people to.

Nobody outside Meta knows what the automated review is trained on, and it's fair to wonder whether the gambling conversation getting louder could lead to packs being flagged more often for a second look. That leaves operators hanging, worrying if every violation is tied to something specific in an ad or their account, or a final judgment on the category as a whole. All of this to say, the current situation is basically just a vibe check.

The other platforms are stricter on paper. Google certifies a fixed list of gambling types in the US, and anything not on the list can't be advertised, so if Google reads a pack as gambling there's nothing to apply for. TikTok is the one ad platform that names mystery boxes, and its US rules don't allow them. Its shopping side went further in 2026, banning eight break formats by name and limiting breaks to sealed, physical cards, which keeps digital packs out of the in-app commerce TikTok is built to reward.

Apple treats anything that looks like real-money gaming as something that needs a license and a geographic fence, and wants odds shown before purchase. Google Play licenses a fixed list of real-money gambling types, and digital packs aren't one of them. It lists games that take money for a chance at a physical or monetary prize as a violation.

None of that means you're blocked, at least for now. We haven't found a published enforcement action by an ad platform against a digital-pack advertiser. Every pack app I've checked is live in both app stores, and nearly every pack company I've looked up in Meta's Ad Library was running ads there in mid-September 2026. The Ad Library doesn't show whether any of them hold an authorization. What it does mean is that your biggest acquisition channel runs at the "sole discretion" of Meta, a company that doesn't know who you are and doesn't know what to do with you.

Authorization comes with its own costs too, because demographic and geographic restrictions cut down on the potential audience pool before they even touch the algorithm. That means you're paying a premium from the jump for less functionality.

Where You Stand Right Now On Ad Platforms and App Stores

I* read the gambling policies of 15 ad platforms and app stores to see where a digital pack stands on each. None of them names digital packs or rips. They judge the mechanic instead: paying for a chance at a prize worth money. Here's where that leaves you if a platform decides your pack is gambling.

*ok, I admit that I had to ask someone from legal for the ELI5 version just to make sure I got it right before publishing, but I mostly had it!

Two things hold across the grid. Every written route means applying first, and no row means "allowed." And the platforms police the same creative move: Google, TikTok and Microsoft all flag ads that present the rare pull as the likely outcome.

Why The Big Players Aren't Worried

Your competition is no longer just other pack companies. Companies from adjacent industries are getting in. GameStop sells video games, and launched Power Packs with PSA earlier this year. Underdog runs fantasy sports and prediction markets, and launched Underdog Rips in September. Triumph runs real-money mobile arcade games and now has Rips by Triumph. Each of them came in with infrastructure and an audience it already built.

The clearest example is Fanatics. It first saw the vision in August 2021: a digital sports platform for collectibles, merchandise and betting. It bought Topps and Mitchell & Ness by February 2022, launched a sportsbook in 2023 and added a standalone mobile casino in 2025. It now holds the exclusive NFL, NBA and MLB trading-card licenses and makes the cards under the Topps name. It sells digital packs in two of its own apps: Instant Rips through breakers on Fanatics Live starting in 2025, and Topps Instant Packs inside Fanatics Collect as of summer 2026. All of it culminates in its keystone event, Fanatics Fest, which drew more than 200,000 attendees to New York in July 2026.

Each of these companies entered with an audience it already owns, so it doesn't need an ad platform's permission to reach its own users. However, scale doesn't exempt anyone from regulators. The same month Underdog launched Rips, it was forced to pull its Drafts product from seven states. Regulators there said it couldn't hold a fantasy license and offer prediction markets, and Underdog chose to keep prediction markets.

Your Competition Isn't Just Rips

The $25 your customer spends on their first pack doesn't sit in a budget labeled "digital packs" waiting for the best pack to win it. It competes with:

• dinner out
• a couple of extra drinks at the bar
• going to the movie theatre
• the latest "must try" viral sensation

And everything else your customer could do with a few extra dollars that week.

On the ad platforms it's even worse. Your ad isn't just bidding against other pack companies. It's bidding against every advertiser that wants the same person, and many of them have far more conversion signal to bid with.

Most of them don't sell cards at all. Acquisition in this category is a fight for one person's attention and spending money, and reaching casual buyers outside the usual digital-pack crowd is where the real growth is.

What Owning Your Growth Looks Like

Before deciding what to do, it helps to know what everyone else is doing. In September 2026 we looked at who in this category is running Meta ads, and how much creative each is running. A handful of companies hold most of the active ads, and everyone else is running at a lower volume. Those are counts of creative, not spend. They can't tell you whether any of it is working or what's right at your scale. We haven't found a published customer acquisition cost for this category, so the only benchmark you have is your own numbers.

A better audience won't change how an ad platform classifies you. What you can change is how efficiently you buy while the channel is open, and how much of your growth depends on that one channel at all. You can plug into a bigger company's app, supply its packs and grow on its audience instead of your own ad account. Or you can build acquisition you control. Both can work. If you're choosing the second, here's where to start.

Give The Algorithms Better Signal To Start From

If you run broad and let the ad platform optimize off your web pixel or your app's install and purchase events, that works as long as the platform has enough of your signal to learn from.

For a small company in a category the platform doesn't recognize, the signal is the thin part.

On iOS, where install attribution is aggregated and app campaigns leave fewer targeting levers, it's even thinner. The major players don't have this problem, because their users are already in their apps.

We wanted to see what a pack buyer looks like from the outside, so we built the closest picture we could from our own network: the shoppers who look most like pack buyers. The obvious part checks out. They're adults buying from sports, gaming and fandom brands.

The less obvious part is what else they buy. Measured against the average shopper, the category they over-index on most is streetwear, ahead of any sports category. That's the drop-culture crowd, and its vocabulary of grails and drops is already yours.

That's the kind of pattern our commerce graph exists to find: who your buyer is, and what else they're likely to buy.

That's what Proxima is built to do. We build audiences from what people actually buy across a network of brands, with consent collected at those brands' checkouts and no specific brand identifiable in any audience. Delivered to your ad account as a seed, an audience like that gives the platform's model real purchase behavior to expand from instead of your customer list alone, so it goes looking for people who look like your buyers and have never bought from you.

Meet Your Audience Where They Are

If most of your installs are coming from one platform, a reclassification becomes an operational issue, not just a marketing one. The key is focusing on growing your presence across all of the places your audience invests their time and attention. Partner with creators and the hobby community to retain loyal customers and find newcomers across a range of networks. And be sure to read the creator platforms' rules before you sign anyone: YouTube and Twitch both restrict creator links and codes for anything they read as gambling.

Build Distribution You Control

The mechanics that already work in this category are partnerships and drops. Arena Club has run weekly packs with Yahoo Fantasy on a fixed window, and a separate weekly series with eBay with the full checklist published up front. Fanatics distributes Instant Rips through breakers. Courtyard focused on community, growing its Discord to about ten thousand people.

Cadence and scarcity give a drop its format, and the brand's audience gives it a channel. None of it depends on an ad platform's permission, because the audience you want will meet you where you are.

Where This Leaves You

The gambling question will most likely keep being argued. Whether you're operating under today's rules or whatever comes next, you'll still need ad platforms to find new customers, and you'll want to turn them into an audience you own.

A test with Proxima is two audiences built from purchase behavior, each in its own ad set, run against the audience you already trust most. Leave them alone through the learning phase, then compare cost per purchase, net of buybacks, in whatever tool you already use. Run it on the budget you'd be spending anyway. There's no extra charge for the test. After that, you pay a fee only on the spend that runs through our audiences, which is a small price if they're beating the audience you trust today. Book a time with me and we'll set it up together.

Sources

• Barron's, Nick Devor, "Gambling Sweeps Across Another Industry. Welcome to the Future of Trading Cards." (web: "How Arena Club and Fanatics Are Turning Baseball Cards Into Online Casinos"), Aug 26, 2026 (updated Aug 27). https://www.barrons.com/articles/arena-club-fanatics-baseball-cards-online-casinos-bf0c4232
• ESPN, Dan Hajducky, "Could box breaking be considered gambling or a lottery?" Jun 20, 2026. https://www.espn.com/mlb/story/_/id/49098946/could-box-breaking-considered-gambling-lottery
• The Athletic (The New York Times), on arbitration claims against Whatnot over breaks and repacks, Mar 16, 2026. https://www.nytimes.com/athletic/7121448/2026/03/16/whatnot-sports-cards-breaks-repacks-gambling/
• Womble Bond Dickinson, "Chase Trading Card Repacks Face Growing Legal Scrutiny," Aug 5, 2026 (on Cal. Penal Code §319.3, added 1994). https://womblebonddickinson.com/us/insights/alerts/chase-trading-card-repacks-face-growing-legal-scrutiny
• California AB 831 (Ch. 623, Stats. 2025), signed Oct 11, 2025, in force Jan 1, 2026. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB831
• Meta Transparency Center, Online Gambling and Games policy (last updated May 19, 2026). https://transparency.meta.com/policies/ad-standards/restricted-goods-services/gambling-games/
• Google Ads, Gambling and games policy, US certification list. https://support.google.com/adspolicy/answer/15132179
• TikTok Ads, Gambling and Games policy (updated August 2026); TikTok Shop US Gambling Policy (updated Sept 17, 2026).
• Apple App Store Review Guidelines 3.1.1 and 5.3.4; Google Play Real-Money Gambling, Games, and Contests policy.
• Proxima review of the published gambling policies of 15 ad platforms and app stores, checked Sept 23, 2026 (the table above; each platform's policy is linked in its row).
• GameStop, "GameStop Launches Power Packs for Digital Trading Cards," April 2026. https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Launches-Power-Packs-for-Digital-Trading-Cards/default.aspx
• Underdog, Rips announcement and help center, Sept 1, 2026; RotoWire, "Underdog Shutters 'Drafts' In 7 States To Preserve Prediction Market Platform," Sept 7, 2026.
• CNBC on Fanatics' $325M raise and platform plan, Aug 10, 2021; on the Topps acquisition, Jan 4, 2022; on Mitchell & Ness, Feb 18, 2022. Fanatics Casino launch, May 2, 2025. ESPN on Fanatics' exclusive NFL card license, Apr 2026; Fanatics newsroom on its NBA and MLB card licenses. TSNN on Fanatics Fest attendance (Fanatics' own figure), Aug 7, 2026.
• cllct via Fanatics, "Fanatics enters repack market with Instant Rips," Mar 2025, https://www.fanaticsinc.com/news/cllct-fanatics-enters-repack-market-with-instant-rips; Topps Instant Packs announcement, Aug 27, 2026.
• Proxima analysis of Meta's Ad Library (by Page ID, US, active ads; pulls on Sept 1, 3 and 15, 2026). Counts of creative, not spend.
• Proxima analysis of five digital-pack companies, September 2026: a replica of our onboarding process, plus category analysis across the Proxima network. Categories only; no brand is identifiable.
• Yahoo Sports, Yahoo Fantasy and Arena Club weekly Slab Packs, Oct 23, 2025; Sports Illustrated, Arena Club weekly slab pack drops with eBay, Jul 30, 2025.
• Exitboard, interview with Courtyard's founder, Sept 12, 2023. https://exitboard.ai/episodes/raise-7m-pre-revenue-yc
• YouTube and Twitch creator policies on gambling content, read Sept 23, 2026.

‍