The most crucial part of each US bill aiming to limit what kinds of sweepstakes contests are allowed in a state is how the paremeters of what the state is trying to prohibit is defined.
Those unfamiliar with the sweepstakes gaming space might think that social gaming is an entirely different vertical from sweepstakes.
In reality, most sweepstakes operators will tell you they are a social gaming product. A core part of the offering is a free-to-play version of the site. Similar to social games like Candy Crush, these sites allow users who would like more coins to play to purchase those coins in addition to offering them for free for things like logging in every day or waiting a certain period of time.
In sweeps parlance, these tokens are generally referred to as Gold Coins. Sweepstakes sites usually offer a second currency, Sweeps Coins, which are earned when Gold Coins are purchased and cannot be purchased on their own. These Sweeps Coins can then be used to play the same games as Gold Coins work on but pay out in Sweeps Coins, which can typically be redeemed for cash.
“Payment” and “currency” are ambiguous terms
However, the phrase “dual-currency” doesn’t fully address the complexity of that concept. Take, for instance, how a Montana bill that is the governor’s approval away from becoming law defines sweepstakes sites:
“[Internet gambling] includes online casinos, by whatever name known, which constitute internet gambling and therefore are prohibited. This includes but is not limited to any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”
Given that the definition says “payout” and not “withdrawal”, it creates questions about what counts as a currency.
Many social gaming sites, including social casinos run or branded as part of regulated U.S. casino companies, also offer players multiple types of rewards. Some of these sites have three or four different types of coins, hearts or points players accumulate by interacting with the app.
Hard Rock social casino tied to real-money comp program
Take, for example, Hard Rock Neverland Casino. The app gives players free coins, diamonds, W Dollars and allows users to sync their Unity card (Hard Rock Casino’s loyalty program) to earn tier credits and Unity Points. Some game play awards tier credits, but the Unity Points are only earned via real-money purchases in the app. These Unity Points have a comp cash rate of 1,000 points to a dollar that can be used at Hard Rock Hotels, restaurants at Hard Rock Casinos and in the gift shop, amongst other things.
These sites are also regularly mentioned on internet forums dedicated to how users can earn things of real world value through social gameplay, such as the Reddit page called SwagBucks.
So, like Sweeps Coins, Unity Points are only earned upon purchase of other points. Unlike Sweeps Coins, these points cannot be used for gaming, but they do have cash value as comps at Hard Rock properties.
MGM Slots Live allows point redemption for real-money bingo
Or, take a look at MGM Slots Live, a social casino where players can buy coins to use on free-to-play slot machines or earn them for free on their own. Then, based on that slot play, users collect loyalty reports that can be redeemed for a range of rewards in the MyVIP store including hotel stays, meals, Las Vegas shows or even a free round of real-money bingo at the Plaza Casino on Fremont Street.
In these instances, players are being rewarded for either their purchases or their play with a system…some might call it a currency…that has real-world value, be it in the VIP Rewards store on the MGM Slots Live app or the Unity Points users can redeem at Hard Rock Casino properties.
Which begs the question: if Gov. Greg Gianforte signs SB555 into law, do these operators need to geofence Montana users out of participating?
There are already a handful of states like Washington, Kentucky and Michigan that social casino operators steer clear of, but if more states adopt legislation with definitions akin to Montana’s there is a chance that list could grow.
iGaming Expert reached out to both Hard Rock and MGM Resorts about their plans for Montana. MGM declined to comment on the story.
Social casino companies looking into sweeps options
PlayStudios, the platform behind MGM Slots Live acknowledged that, even though the company focuses on purely social gaming, the sweepstakes industry is eating into its customer base, indicating that there is overlap between social and sweepstakes and that sweepstakes is arguably not purely a way for real-money customers to work around the law.
During the company’s Q1 earnings call this week, PlayStudios Co-Founder, CEO and Chairman Andrew Pascal noted that the company has decided that if they can’t beat the sweepstakes business, they might as well join it.
“In addition to broader market weakness, the social casino category is being impacted by the rising popularity of sweepstakes styles offerings, which are capturing increasing mind share and spend from players,” he noted. “Because we don’t yet offer a competitive sweepstakes proposition, we believe this dynamic is the primary cause of the pressure on our player activity and monetization. As a result, we’ve been hard at work on the development of a sweepstakes solution and have made strong progress in this quarter.”
