Adam Roarty Editor
Adam Roarty is a journalist covering sports betting, regulation, and industry innovation for CasinoBeats. His coverage includes tax increases in the UK, covering breaking stories in the ever-evolving landscape of US betting such as the...
Read Full BioNew legislation in Illinois has been filed that could make sweepstakes casinos explicitly illegal. The state had issued cease-and-desist letters to 65 companies, but platforms have largely ignored the orders.
The Illinois Gaming Board (IGB) demanded major sweepstakes casino operators, including VGW, Stake, Modo, and High 5, end operations in the state earlier this month.
However, only two of the companies now list Illinois as a restricted state: JefeBet and Jumbo88. All others appear to be continuing operations in Illinois as normal.
In its letters, the board stated, “The IGB demands that you block Illinois residents from accessing your services or discontinue offering cash, gift cards, and other prizes through your service. Failure to do so may subject you, your affiliates, and business partners to civil or criminal penalties.”
Whether penalties will now be forthcoming remains to be seen. But lawmakers are moving to further clarify state laws on unregulated gambling.
Bill Targets Gaming Machines & Sweepstakes
Sen. Bill Cunningham introduced SB3439 this week, which “changes the definition of ‘gambling device’ to include any vending or other electronic machine or device, including…a machine or device that awards credits…that offers a person entry into any contest, competition, sweepstakes…that involves or is dependent upon an element of chance for which the person may receive a gift, award, or other item or service of value.”
It goes on to say that “a person shall not be convicted of gambling if the person participates in a game of skill or chance where money or other things of value can be won but no payment or purchase is required to participate, except where conducted through the use of a gambling device or by means of the Internet.”
This would seemingly prohibit even free-to-play sweepstakes casino games. Operators frequently argue that users’ ability to engage in free-to-play games should make platforms fair and legal.
Cunningham introduced similar legislation last year, but it made little progress. In the House, Rep. Edgar Gonzalez has proposed legalizing online casinos in Illinois. Like Cunningham, he has failed in his previous efforts to pass similar legislation. The coming months will tell if there is more appetite to regulate the igaming industry, including sweepstakes casinos.
Operators May Have to Adapt Models in Illinois
In other states that have banned dual-currency gambling, operators have introduced a new model. For example, Modo Casino launched Modo Stars in response to the ban in California. This system allows players to exchange free-to-play Gold Coins for Modo Stars rewards.
This would also appear to be illegal if the legislation in Illinois passes.
The CEO of Modo’s parent company, ARB Interactive, has argued against states banning sweepstakes casinos, claiming that such bans will not reduce demand for casino games but will instead drive users to more dangerous, offshore platforms.
Patrick Fechtmeyer told CasinoBeats this week that his aim is to have states modernize their sweepstakes laws. The legislation in Illinois, however, criminalizes, rather than regulates, the sweepstakes industry.
It is an industry that is constantly evolving as lawmakers across the country attempt to address the legal loopholes that effectively allow users to gamble at sweepstakes casinos. Our new series, The Pulse, provides the latest updates in this ever-changing world.
