A bill that would ban sweepstakes casinos in Indiana took another step further Wednesday despite a desire to regulate them.
Senate Public Policy Chairman Ron Alting, the Senate sponsor of HB 1052, wanted to approve an amendment that would have legalized and taxed sweepstakes casinos in the state. He quickly learned that was not an option, he explained at Wednesday’s meeting.
“Let me just say, I offered the amendment for the sweepstakes which regulated and taxed it that I thought would be appropriate but got a tremendous amount of feedback of ‘no go,’ particularly with leadership with both chambers as well, it was really going to be dead on arrival back to Public Policy members of the House of Representatives,” Alting said.
The bill, which makes technical changes for multiple state agencies, passed the committee by an 8-0 vote. It comes a week after HB 1052 passed the House by an 87-11 vote.
The Indiana General Assembly adjourns Feb. 27.
Still some life for sweepstakes?
Despite a unanimous vote approving the bill, Alting seems to think the story for sweepstakes in the state is not over.
“In lieu of time in this short, short session and trying to beat this thing to death in a conference committee, I chose it was just best to listen to my colleagues to not call the amendment,” Alting said, apologizing to sweepstakes supporters. “… There will be another session that we’ll see what we can do.”
Alting was not alone in wanting to see the industry regulated.
“I too would have very much liked to see that amendment that you wanted to offer,” Sen. David Niezgodski said. “I’m not gonna vote no on the bill, I’m gonna vote yes on the bill, but I hope we can have some further conversations on that.”
Regulating the industry would have brought “upwards of $20 million” in annual tax revenue to the state, according to Sean Ostrow of the Social Gaming Leadership Alliance.
Fresh arguments from sweepstakes industry
So far, legislative committees across the country have heard much of the same testimony from the sweepstakes industry about regulating the games and how bad actors will always remain.
Ostrow took the opportunity to point out that those looking to crack down on the games admitted they are legal. He was referencing testimony from two members of the Indiana Gaming Commission that noted they lack the power to send cease-and-desist letters as the sweepstakes operators are not breaking the law.
“We don’t see this as necessarily a technical correction. Certainly, in previous testimony the gaming commission noted that these games are, in fact, legally operating today. We agree,” Ostrow said before quoting the laws governing sweepstakes and mentioning they needed to be modernized for the online environment.
Do it for Gen Z
ARB Interactive Co-Founder Patrick Fechtmeyer asked the committee to consider the younger generations.
“I grew up in the first generation native to the internet and one lesson is clear: banning digital behavior does not eliminate demand,” Fechtmeyer said. “It pushes it into less regulated, less safe environments. That’s why I’m here – not to defend a loophole or argue for [de]regulation. I’m here to advocate for clear, modern rules that reflect our digital reality.
“I want to be respectful and clear here: I question whether we’ve fully examined an alternative to prohibition,” he continued, stating that he has seen proof the California ban pushed former sweepstakes players to offshore operators. “… Social plus gaming is not a new phenomenon or a loophole. It is the natural evolution of the same sweepstakes model Publishers Clearing House operated legally for decades updated for smart phones, digital ecosystems and a new generation while still familiar to those who remember Ed McMahon and oversized checks.”
ARB Interactive bought Publishers Clearing House at an auction last summer for $7.1 million. Ed McMahon was a spokesperson for competing sweepstakes operator American Family Publishers.
Poker gets exception
Sen. Kyle Walker got an amendment passed on unanimous consent to leave peer-to-peer poker games out of the sweepstakes conversation.
“This just clarifies that peer-to-peer skill-based poker games are not sweepstakes games, which they’re not, and there’s some important differences in the two types,” Walker said. “A sweepstakes game is a chance-based game, it’s the player vs. the house, peer-to-peer poker is a skill-based game and it is player vs. player.”
