An legal expert has predicted that sweepstakes casinos may change their trademark structure in the near future as the marketplace continues to change and adjust to shifting legal requirements.
Sweepstakes casinos have gotten around strict gambling regulations across the United States with their unique two-currency structure. Most sweeps operators use one free currency that allows gamblers to access any game without paying, meaning no purchases are necessary. There is also a second currency, typically referred to as Sweeps Coins, that is added to a player’s account if they make a real-money purchase. Sweeps Coins are the only currency of the two that can be redeemed for real-life cash.
Attorney Stephen C. Piepgrass offered an interesting perspective while being interviewed about the future of sweepstakes casinos, and it looks like this structure could soon change.
Piepgrass predicted that sweepstakes casinos will not remain in their current form going into the future. This could be due to pressure from ongoing class action lawsuits or “regulatory scrutiny” from government entities forcing the operators to change their methods of operation. While the “no purchase necessary” model is what has kept sweepstakes casinos legal across the United States and in some other places, it has also been the reason lawmakers have started focusing in on it.
Some states have even started writing up bills that target sweepstakes casinos directly. Mississippi recently passed Senate Bill 2510, which would make sweepstakes casino operations in the state a felony that is punishable by fines up to $100,000 USD. The language within the bill states that this dual-currency model is explicitly no longer allowed, which is the same regulation set forward by the state governments of New Jersey, New York, Maryland, and Connecticut.
Social and Promotional Gaming Association told next.io in a resulting report that it was “deeply disappointed” in Mississippi’s ruling, claiming that it unfairly targets sweepstakes casinos.
“This bill not only misrepresents the nature of sweepstakes gaming — an established and consumer-friendly model — but also sets a troubling precedent by equating these operations with illicit gambling,” the SPGA stated.
While these are the only states that currently ban sweepstakes casinos, there are plenty of other states with ongoing legal battles directed at specific operators. Due to the continued pile-up of lawsuits, Piepgrass predicted that sweepstakes casinos will have to come up with a new structure to avoid further targeting by lawmakers.
“Regulators, marketplace competitors, and proponents of regulated iGaming, on the other hand, contend that the sweepstakes model is merely a façade,” Piepgrass said. “They assert that the true incentive for players is the potential for real monetary rewards. This debate underlies regulatory scrutiny of the online sweepstakes casino model.”
Meanwhile, many states are looking to expand their online gambling options, including by adding more options for sports betting. It’s another example of the push and pull that government forces engage in while trying to balance the potential revenue benefits of allowing iGaming in their states. With so much money at stake, it’s a good bet that further allowances will continue to be made and established sweeps operators will evolve their business models to conform with what restrictions pop up in the meantime.
Players must be 21 years of age or older or reach the minimum age for gambling in their respective state and located in jurisdictions where online gambling is legal. Please play responsibly. Bet with your head, not over it. If you or someone you know has a gambling problem, and wants help, call or visit: (a) the Council on Compulsive Gambling of New Jersey at 1-800-Gambler or www.800gambler.org; or (b) Gamblers Anonymous at 855-2-CALL-GA or www.gamblersanonymous.org.
