Sweepstakes casinos have dominated the discourse across the US over the last 12 months, and, as such, the vertical has caught the attention of lawmakers in the country.
The landscape for sweepstakes casino operators, which Eilers and Krejcik Gaming values at $5.6bn, continues to be complicated as the legality of the sector is debated by operators and legislators alike.
Here at iGaming Expert, we have all the latest from around the US as sweepstakes go under the microscope.
Maryland and Mississippi
In Mississippi, the Senate made history when it became the first US legislative chamber to approve a ban on sweepstakes, however, its efforts may be under threat.
Following the Senate Gaming Committee stifling a House-approved bill on the introduction of sports betting to the state, Rep. Casey Eure has shoehorned sports betting language into SB 2510 – the legislation seeking to prohibit online sweeps and increase punishments for offshore online casinos in the state.
The bill’s amendment now states that online sports pools and race books will be legal in Mississippi, and commercial casinos would be able to partner with up to two online sportsbooks. The proposed tax on sports betting is 12%.
Meanwhile, a similar bill in Maryland, SB 860, has also received approval from the state’s Senate. If successful, games, contests or promotions that utilise a “dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, or any chance to win any prize or award or cash equivalents” would be prohibited.
Notably, the bill would criminalise not only the operators of sweeps-style games but also their suppliers, including payment processors, geolocation partners, and affiliates.
SB 860 now awaits approval from Maryland House representatives, while the amended bill in Mississippi has been passed in the house but now awaits concurrence from the Senate.
This may be complicated, however, as the push to tag sports betting onto SB2510 has been met with backlash among Senate representatives. Sen. David Blount, co-author of SB 2510, for example, has long been a consistent opponent of online sports betting.
The Mississippi Senate’s decision is expected by the end of next week.
New Jersey and Nevada
Fresh bills in New Jersey and Nevada have also taken aim at sweepstakes.
In the Garden State, Assemblyman Clinton Calabrese has introduced Assembly Bill 5447 which seeks to prohibit sweepstakes that imitate casino games.
Calabrese previously introduced Assembly Bill 5196 that looked to introduce a regulatory framework around the sector, however, this fell short.
Similarly, SB 256, sponsored by Sen. Rochelle Thuy Nguyen, takes aim at illegal online gaming operators in Nevada.
The proposal requires “the disgorgement of any profits, gains, gross receipts, or other benefits relating to illegal gaming activities” and “seeks to hold online gaming apps accountable for illegal gaming activities”.
If successful, operators found guilty will be required to forfeit profits and may face stronger criminal penalties, including the possibility of felony charges. Additionally, it seeks to target illegal operators based outside of Nevada if it takes bets from people within the state.
Florida
Meanwhile, in Florida, the legislation against sweepstakes is less explicit, however, the vertical still appears to be in the firing line.
Separate bills introduced in the Senate and House propose to make it a third-degree felony for anyone other than the Seminole Tribe to operate an online casino or sportsbook – a penalty that is punishable by up to five years in prison.
However, where the fears come from for sweepstakes is the definition of internet gambling used by the bills appear to be inclusive of the vertical.
Included within the wording is the phrase “money or other thing of value”, which could include the dual-currency play utilised by sweepstakes and social casinos, and also a gaming product that “simulates casino-style gaming”.
SPGA hits back
The Social and Promotional Games Association has hit back at the proposed legislation in New Jersey and Florida, describing the former as a “reckless attempt to ban sweepstakes” and warning of the “unintended consequences” of the latter to legitimate providers in Florida, as well as to the state’s economy.
New Jersey’s push was met with particular ire, given that the state previously appeared to be open to the idea of incorporating sweepstakes into the regulatory framework for casinos.
The SPGA called on lawmakers to take a “smart, forward-thinking approach” to sweepstakes rather than consider “outdated prohibition”.
It added: “New Jersey has led the way in gaming regulation—not followed. With innovative licensing frameworks for digital entertainment, the state sets the standard.
“Our members take pride in driving innovation and providing safe, engaging digital entertainment to New Jersey consumers. As the regulatory landscape continues to evolve, we remain committed to working with policymakers to ensure that millions of American adults can continue enjoying their preferred gaming experiences within a properly regulated environment.”
The group concluded by urging lawmakers to pursue the balanced regulatory approach previously introduced to protect consumers and enable innovation to thrive.
