As online sweepstakes casinos continue to gain in popularity, state legislators and regulators are taking note.
At least seven states now have active legislation targeting online sweepstakes operators with prohibitions on the unregulated gambling-like activities:
- Connecticut
- Florida
- Maryland
- Mississippi
- Nevada
- New Jersey
- New York
CT takes action on sweepstakes
Connecticut’s House General Law Committee is sponsoring SB 1235, which would prohibit lottery couriers and redefine gambling in the state. That includes prohibiting “real or simulated online casino gaming or sports wagering” by sweepstakes platforms.
Last week, the Connecticut Department of Consumer Protection sent a suspension order to High 5 Games, which also provides games to the state’s regulated online casinos. The letter said High 5 had offered unregulated casino gambling to residents, including those on the statewide exclusion list.
There were 1,100 customers in Connecticut who made purchases and played games, 911 of which lost a total of $937,938.
Of those 911, 108 were on the state’s gambling exclusion list. According to a DCP spokesperson, 6,470 people are on that list.
High 5 pulls out
After the notice, High 5 stopped its offering in Connecticut and said it is “committed to cooperating with Connecticut regulators to resolve this matter.”
“High 5 Games has always upheld the highest regulatory standards and remains committed to compliance across all jurisdictions in which we operate,” the company said in a statement.
“Throughout our 30-year history as an established gaming brand in the U.S., we have worked closely with regulators to ensure responsible and transparent business practices, offering an experience to our loyal business partners that is both enjoyable and safe.”
Florida bills target sweeps
Two sweepstakes prohibition bills, Senate Bill 1404 and House Bill 953, were filed before Florida lawmakers started their session earlier this month. The bills seek to strengthen the state’s definitions of the online gambling market, which is controlled by the Seminole Tribe’s Hard Rock Bet.
The Social and Promotional Games Association said the bills “conflate safe and legal social sweepstakes games with ‘Internet gambling’ and ‘Internet sports wagering.’”
The association, which represents the sweepstakes casino industry, said the legislation is an overreach.
MD Senate says no to online sweepstakes
There have been numerous hearings in the Maryland legislature on bills prohibiting online sweepstakes. Bills started in both chambers.
Senate Bill 860 passed unanimously, 47-0, and now awaits its House hearing.
The SPGA said the legislation “represents a dangerous overreach” by dictating “what games adults can play on their phones.” The association also said the operators pay sales tax on digital purchases.
MS prohibition tied to sports betting
A bill to prohibit sweepstakes, SB 2510, passed with massive support in the Mississippi Senate earlier this session. However, it was pulled into the fight to expand sports betting online.
The Senate did not act on a sports betting expansion bill sent over from the House. Last week, the House inserted its sports betting language into the Senate sweepstakes prohibition bill. Based on how the Senate has acted toward online sports betting this session, that amendment could act as a poison pill.
The SPGA said the Senate’s passage of the bill “unjustly targets sweepstakes and conflates a safe and legal form of entertainment with illegal operations.”
New Jersey pivots
Assemblyman Clinton Calabrese initially proposed this session to regulate sweepstakes casinos, which would have created licensing and taxation on the industry.
However, he has since replaced an initial bill, A 5196, with A 5447, which would “prohibit sweepstakes model of wagering.” It awaits a hearing in the Consumer Affairs Committee.
The SPGA calls the legislation a “reckless attempt to ban sweepstakes” and “shortsighted.” It also notes that the new bill contradicts Calabrese’s earlier bill.
New York looks to ban sweepstakes
Prior to the session, New York Sen. Joe Addabbo told LSR that sweepstakes operators found a “loophole” to offer unregulated gambling.
Both Addabbo and Assemblywoman Carrie Woerner introduced bills prohibiting online sweepstakes, S 5935 and AB 6745. They chair their respective chambers’ Racing, Gaming and Wagering committees.
The SPGA “unconditionally opposes” the bills:
“We appreciate New York lawmakers’ formal recognition that social sweepstakes are a legal form of entertainment — you don’t need to outlaw something if it is already illegal,” a statement said. “But that’s where our appreciation ends. Albany legislators have no business dictating to New Yorkers what games they can play on their phones.
“This deeply flawed legislation is an affront to personal freedoms, an insult to New York voters, and a colossal waste of government resources.”
Nevada tries to stop Kalshi
Nevada regulators recently took action, asking Kalshi to shut down its sports event prediction markets, arguing it is a form of unlicensed gambling.
The state did grant the operator more time to make its case.
Meanwhile, Sen. Rochelle Nguyen has introduced SB 256, which aims to strengthen the state’s regulatory market further.
