The Social and Promotional Games Association is taking a victory lap on behalf of the sweepstakes casino industry after the failure of three state bills that would have banned the business model. Arkansas and Maryland abandoned their efforts this week, while Mississippi’s effort ran out of time the week before.
The trade organization struck a smug tone, describing the bills as “anti-innovation” and the lawmakers opposing sweeps as “dangerously out-of-touch.”
A statement attributed to an anonymous spokesperson reads:
These bills shared the same fatal flaw: no facts and no foundation. Legislators are consistently rejecting efforts to criminalize safe, digital entertainment enjoyed by millions of adults across the U.S.
The popularity of social casinos using the sweepstakes model has exploded over the past few years, as efforts to expand real-money online casino gaming in the US have sputtered out. Demand for online gambling is high. In states that lack legal real-money options, players have a choice between using illegal offshore casinos—which come with their own set of risks and hassles—or trying to find some sort of “next best thing.”
Sweepstakes casinos have aimed to be the latter. The business model takes play-money social casinos and adds the potential to win cash prizes using federal sweepstakes law and a “two-currency system.”
Under the sweeps system, purchases of play-money tokens come with free “Sweeps Coins,” which players can use to try to win cash prizes.
Why it’s hard to ban sweeps
Many lawmakers have come to see this as a loophole to be closed. However, one of the difficulties they’ve encountered is in crafting legislative language broad enough to be effective, yet narrow enough not to inadvertently outlaw conventional sweepstakes in the process. Many non-gaming businesses use game-like sweepstakes to promote their products. These are largely non-controversial, but could become collateral damage of a poorly-worded bill.
The SPGA has invoked that possibility as one of its arguments against these bills. The same spokesperson said:
When legislation threatens everyday perks from airlines, hotels, and your local coffee shop, it’s clear the bills aren’t just misguided, they’re dangerously out of touch.
That isn’t the only thing holding legislatures back on the sweeps issue, however. Some efforts have also failed because of lawmakers’ insistence on tying a proposed sweeps ban to an expansion of legal gambling. That results in opponents of the latter becoming opponents of the ban in the process.
That’s what happened in Mississippi, where the ban passed in both chambers, but the House version included authorization for statewide mobile sports betting. The Senate wouldn’t agree to that, so the two versions couldn’t be reconciled before the deadline.
Meanwhile, the National Council of Legislators for Gaming States (NCLGS) has included anti-sweeps language in its model iGaming legislation. That, too, may lead to gridlock between those that want a sweeps ban alongside regulation of real-money online casinos, and those that would like all forms of online casino gaming to be illegal.
Regulatory C&Ds continue without legislation
The failure of anti-sweeps bills only means a partial reprieve for sweepstakes casinos. Many state regulators have been taking independent action to order sweepstakes casinos out with cease-and-desist notices. Elsewhere, like New York, some sweeps operators are withdrawing voluntarily, sensing that a ban is imminent.
This week alone, Pennsylvania has sent out C&Ds to a list of 18 sweeps operators, according to PlayPennsylvania. And Delaware has tried again to force out Virtual Gaming Worlds, which owns Chumba Casino, Luckyland Slots, and Global Poker. VGW, which is not a member of the SPGA, has complied with the request, though it had ignored a previous such letter sent in 2023.
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