Indiana Moves Closer to Sweepstakes Casino Ban as Bill Makes Progress

An Indiana bill to ban sweepstakes casinos is making progress. The legislation passed its second reading in the House and was ordered engrossed.

HB1052 is a sizeable document at 52 pages long and includes a range of different changes to laws related to alcohol, tobacco, and gambling. One proposal is to define and establish civil penalties for conducting a “sweepstakes game.”

A proposed amendment to regulate rather than ban platforms was rejected by the committee, 34-54. Rep. Alex Burton suggested operators should register with the Indiana Attorney General before offering games in the state.

Instead, the committee moved the legislation forward with an outright ban on platforms. Slight amendments changing the language were made, including adding “multi-currency” to provide a wider-reaching prohibition on operators using different virtual coins to allow players to gamble on casino-style games.

The amendment also downgraded penalties from criminal to civil, meaning operators would face fines and administrative orders rather than jail time if found to violate the new law.

Committee members approved these changes in a 10-0 vote. It will now go to a third reading, with further amendments possible before a full vote in the House. If passed there, it will move to the Senate for consideration.

Sweeping Definition

The bill, introduced in December, now defines a sweepstakes game as any online promotion that:

“Utilizes a dual-currency or multi-currency system of payment allowing a player to exchange currency for a cash prize, cash award, or cash equivalents, or a chance to win a cash prize, cash award, or cash equivalents; and simulates casino-style gaming, including slot machines, video poker, table games, lottery games, bingo, and sports wagering.”

It would authorize the Indiana Gaming Commission (IGC) to impose penalties of up to $100,000 per violation. The ban would come into force on July 1, if approved. This would make Indiana the seventh state to explicitly ban sweepstakes casinos.

Several other states have active bills under consideration in the new legislative session, with Maryland joining a growing list earlier this month.

Gaming Commission Supports Bill

In a hearing earlier this month, Nate Friend said that the agency supports a ban on sweepstakes casinos as in the public interest. Friend said operators have found a loophole to essentially offer “a form of gambling with no regulation, licensing, or taxation.”

Some states have taken steps to target companies without passing legislation. Last year, Louisiana Gov. Jeff Landry vetoed a bill banning platforms, saying the state already has the authority to drive out operators. The state has instead sent a host of cease-and-desist letters to companies and filed a lawsuit against VGW and WOW Vegas over unpaid taxes.

Natalie Huffman, General Counsel for the IGC, however, said that Indiana law does not clearly ban this type of gambling. She stated, “Other states think their gambling laws are written in a way that can be used against these online casinos. But I don’t think that the way our gambling laws are written, we can move forward with sending a cease-and-desist letter in good faith, based on current law…The multi-currency model is what allows it to operate outside of our current regulatory scheme.”