The new year is barely two weeks old, and several states are already saying sweepstakes casinos are no longer flying under the radar. From the East Coast to the Midwest, lawmakers are moving to shut down what they see as unregulated online gambling while quietly clearing space for fully legal online casinos.
Maryland and Virginia are the latest to join a growing list of states. They want to make sure that if you want to bet, you do it in a way that actually puts some tax dollars back into the local community.
Maryland’s “Burn the Bridge” Strategy
Maryland is not just trying to block an app. It is trying to remove the entire industry from its borders. Lawmakers have pre-filed two bills known as SB 112 and HB 295. These were written with the help of the state gaming agency, which means they know exactly where the bodies are buried.
The strategy here is going after the “helpers.” If you are a bank that processes a sweeps casino’s money or a tech company that provides its GPS data, you are now on notice. Licensed Maryland casinos are being forced to check their contact lists. If they are caught doing business with anyone who supports these “interactive games,” they could lose their own legal licenses.
The penalties are designed to be a deterrent rather than just a cost of doing business. Punishments include potential prison time of up to three years and fines ranging from $10,000-$100,000. Maryland is clearly done with polite warnings and is moving straight to criminal charges.
Virginia’s One-Two Punch
While Maryland is focused on the eviction, Virginia is looking for an upgrade. Delegate Marcus Simon has introduced HB 161, which is basically a “one-in, one-out” policy. He wants to legalize official, taxable online casinos, but only if the sweepstakes guys get the boot first.
Virginia is proposing some of the most expensive fines in the country to make sure they stay away. A first offense will cost an operator $100,000. If they get caught again, the bill jumps to $250,000. Because each day counts as a new violation, a single week of staying online could bankrupt a smaller company. It is a clear attempt to clear the deck so that the 15 planned legal licenses have the whole market to themselves.
The National Domino Effect
Maryland and Virginia are definitely the headliners this week, but they are far from alone. The movement to “unplug” the sweepstakes model is officially a national movement.
California officially shut the door on Jan. 1 by making sweepstakes coins illegal across the state. Major operators already packed their bags because of new laws that can put celebrities and banks in jail just for helping them.
Michigan and Washington already proved this strategy works by using simple warning letters to scare off unregulated sites. Tennessee Attorney General Jonathan Skrmetti announced in December that he had issued 40 online sweepstakes casinos cease-and-desist letters.
Maine, on the other hand, is waiting on its big hearing to clear the way for tribal gaming by tossing out the competition. Even Iowa is getting tough by giving its regulators more power to pull the plug instantly on illegal sites.
Indiana is looking to modernize its own lottery while debating a full ban on the side. Florida and Massachusetts are being more careful, but they are still keeping a very close eye on the money.
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