Modern Battles Against Sweepstakes Casinos
Increasing Legislative Pressure on Sweepstakes as More States Pursue Total Prohibition
Tightening the screws on sweepstakes casinos in the United States is gaining momentum, with Louisiana and Connecticut lawmakers pushing for legislation aimed at curbing this thriving sector. Mirroring the lead of Montana, where regulatory action has sent tremors through the industry, several other states are considering similar measures, causing trouble for sweepstakes casinos nationwide.
A Relentless Pursuit in Louisiana
In a unanimous 99-0 vote on Tuesday, the Louisiana House approved Senate Bill 181, a major stride in the state's attempt to stem the tide of online sweepstakes casinos. Having successfully navigated the Senate and receiving only minor clarifying amendments in the House, the bill now awaits the governor's signature.
The Social and Promotional Games Association — representing companies engaged in sweepstakes and digital promotions — have expressed their disapproval. In a formal statement, the group denounced the legislation, regarding it as a "step backward." Criticizing lawmakers for the blurring lines between legal entertainment and illegal gambling, the SPGA was evidently unsupportive. Despite these vocal protests, the bill's backing remains solid, with few dissenting voices.
This bill improperly threatens Louisiana's economy by stifling digital innovation and forcing compliant companies out of the state.
Senate Bill 181 proposes that sweepstakes casinos be defined as any platform offering casino-style games or sports wagering using a dual-currency system. Typically, users can amass one form of currency freely while another needs genuine currency to purchase. Proponents of the bill argue that these systems enable sweepstakes casinos to bypass traditional gambling laws while providing similar services to licensed gambling operators.
Connecticut Takes a Brutal Stance
Despite the hustle and bustle in Louisiana, Connecticut is not far behind. Last month, the Senate unanimously approved SB 1235, which recently gained House support. The bill now heads to Governor Ned Lamont for the final say. Connecticut's Department of Consumer Protection also endorsed the bill, highlighting it provides regulators with the power to monitor the sector currently operating in a legal gray area.
differential from Louisiana, Connecticut's bill casts a broad net, with the aim of imposing a complete ban on sweepstakes casinos, third-party lottery courier services, and simulated online gambling. Organizing such activities becomes a Class D felony, punishable by up to five years in prison and a $5,000 fine.
Sweepstakes operations have consistently argued that their business models fall outside the boundaries of traditional gambling. While some within the industry have advocated for a regulatory framework, recent developments suggest states are more inclined to slam the door shut first and figure out the details later, as Georgia and Michigan also consider a complete ban.
Insights
Current State of Proposed Legislation Against Sweepstakes Casinos
Louisiana
- Legislation Status: Senate Bill 181 has passed through both the Senate and House in Louisiana. The bill aims to classify devices or platforms using dual-currency payment systems as illegal gambling.
- Next Steps: The bill awaits Governor Jeff Landry's signature. If signed, it will come into effect on August 1[2][5].
Connecticut
- Legislative Progress: Bills aimed at prohibiting sweepstakes casinos in Connecticut are progressing. Specific details regarding the nature of these bills, such as penalties or classifications, are not readily available.
Comparison and Context
Both Louisiana and Connecticut seek to regulate or prohibit sweepstakes casinos. Louisiana's approach is more explicit, targeting sweepstakes casinos by reclassifying them under gambling laws to halt their operations. Connecticut's effort is less detailed but aims to address sweepstakes casinos using regulatory or outright ban measures. Nevada, on the other hand, is enhancing its regulatory powers rather than implementing a direct ban on sweepstakes casinos[2][3]. In conclusion, the legal landscape for sweepstakes casinos is rapidly evolving across the U.S. as states adopt different approaches to tackle these businesses.
- As a result of Louisiana's Senate Bill 181, which classifies online platforms offering casino-style games or sports wagering using a dual-currency system as illegal gambling, the Social and Promotional Games Association, representing companies engaged in sweepstakes and digital promotions, has expressed concern, as they believe it threatens Louisiana's economy by stifling digital innovation and forcing compliant companies out of the state.
- Connecticut's SB 1235, currently awaiting Governor Ned Lamont's approval, goes a step further than Louisiana's bill, aiming to impose a complete ban on not only sweepstakes casinos but also third-party lottery courier services and simulated online gambling, organizing such activities becoming a Class D felony, punishable by up to five years in prison and a $5,000 fine, reflecting a stricter stance against online gambling compared to Louisiana's approach.
