New legislation aims to bring about sweepstakes casino ban in US

New proposed legislation shows that a sweepstakes casino ban is being considered by US state lawmakers.

Sweepstakes casinos have long been under scrutiny as operators have found a way to remain legal despite some states' strict gambling regulations. Sweepstakes casinos allow players to access games and collect in-game currencies for free, but actual money can also be earned by redeeming Sweepstakes Coins, which can be had through purchases of in-game currency, social media campaigns, and mail-in promotions. This model has frustrated some lawmakers and groups across the country.

Now, the National Council of Legislators from Gaming States (NCLGS) has drafted an act that regulates online casinos and may ban sweepstakes casinos.

What is the Model Internet Gaming Act?

The NGLS has come forward with the Model Internet Gaming Act after extensive discussions amongst lawmakers, legal consultants, and gaming experts. The objective is to establish an "effective, comprehensive, and efficient" framework for internet gaming operations. The act features new regulations for revenue generation, advertising, and ensuring safe and responsible gambling. It also aims to require licenses for operators and a strict protocol for operators that want to keep that license.

Perhaps the stand-out section of the Model Internet Gaming Act is a proposed ban on sweepstakes casinos. Page 18 of the draft states that any game, contest, or promotion where a prize is rewarded "based on chance" will be considered unlawful. On top of that, any game accessed by phone or computer that has a "dual currency system of payment," including players exchanging a currency for cash or cash equivalent reward, would be prohibited. This could effectively result in a sweepstakes casino ban across the US. The act even states that simulating casino-style gaming, including table games and slot machines, would be banned, which could affect social casinos as well.

The penalty for violating this policy would range from $10,000 to a high of $100,000. Imprisonment for up to two years could even be on the table for repeat offenders.

The committee that developed this model act includes NCLGS chair and founder Steven Geller, NCLGS president Shawn Fluharty, and legislators from such states as New Hampshire, Massachusetts, Pennsylvania, Washington, and Michigan. Spectrum Gaming Group, the Massachusetts Council on Gaming and Health, and more also weighed in as experts on online gambling.

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