California tribes want to wipe out sweepstakes casinos, here's why

Olivia Richman

Twitter

Author

Publish Date: 11/27/2024

Sweepstakes casinos have recently been the focus of lawsuits across the country, with companies like Virtual Gaming Worlds (VGW) under fire for misrepresentation of its operations and its suspicious redemption limitations. But now, sweepstakes casinos are fighting back for their right to operate states across the country, and that's leading to a battle with tribes in California.

The ongoing issues with VGW in various states, including its most recent lawsuit in Connecticut, has highlighted sweepstakes casinos' business models. These casinos get around strict gambling regulations by not requiring players to make payments in order to play slots or win in-game currency. Purchases must be made in order to get Sweepstakes Coins, which are worth real money when redeemed.

Despite VGW outright denying any wrongdoing, the company has still pulled its casinos out of various states that issued cease-and-desist letters. Now, tribes across California have united to keep trying to take down other sweepstakes casinos like them.

Tribes in California unite to put a stop to sweepstakes casinos

California casino

Tribes throughout California that sometimes view each other as enemies in business have reportedly decided to come together to fight sweepstakes casinos.

Conference Chair of the Indian Gaming Association has started rallying tribal groups together to raise awareness of the purported dangers of sweepstakes casinos. These online establishments are often seen as a threat to real-world casinos because they give players a chance to gamble from home instead of attending in person, using what the American Gaming Association is calling a "loophole" to offer "real money gambling" online.

In August, the AGA asked state lawmakers to take action against sweepstakes casinos, stating that sewepstakes casinos are "entities that have intentionally designed business models to circumvent or exploit ambiguity in state gambling laws and the regulatory frameworks."

The Sports Betting Alliance has also come forward to support the Indian Gaming Association. “This is not an industry that’s in this for entertainment. It’s an industry that’s grooming the next generation for gambling," conference chairman Victor Rocha said. "That’s why you see all the Wall Street money and investor money.”

In response, sweepstakes casinos have organized their own trade body, the Social and Promotional Gaming Association. The SPGA has denied that sweepstakes qualify as gambling, claiming that the old-school, real-world casinos are just worried about established business being disrupted by newer, more innovative providers.

Right now, only time will tell whose side legislators will take. It's possible that such suits will follow in other states, but sweepstakes casinos certainly won't go down without a fight.