Sweepstakes has its moment at NCLGS: Law change needed to regulate or ban

More than 15 years have elapsed since the passing of Ed McMahon, the Tonight Show sidekick also famous for sweepstakes commercials that featured him awarding unsuspecting Americans with gigantic seven-figure checks.

Yet McMahon’s name circulated through the halls of Harrah’s Hotel at Caesars New Orleans on Friday before the nation’s preeminent gambling regulators.

Ahead of next week’s senate hearing in the nation’s capital on sports betting, a panel convened on the online sweepstakes casino market. The issue is one that is sweeping the broader industry. The panel, entitled This Ain’t Your Granddad’s Sweepstakes, delved into hot-button issues on licensing, regulation and taxation associated with the multi-billion-dollar market.

The panel opened the daily agenda at the National Council of Legislators From Gaming States (NCLGS) 2024 Winter Meeting. Moderated by Chris Kannady, a state representative from Oklahoma, the panelists debated the topic before a packed audience. Typically, conferences such as NCLGS save the best panels for last, Kannady proclaimed. In his introductory remarks, the former Marine promised that the session would be the most superlative of the weekend. At a minimum, the lively hour-long panel brought considerable fireworks, underscoring the contentious nature of the topic.

Aside from the strict definition of gambling, at issue is whether a state has the statutory or regulatory authority in prescribing the manner in which a sweepstakes contest may be conducted. Andromeda Morrison, general counsel Ohio Casino Control Commission (OCCC), sought to provide a roadmap on how states may proceed.

“For the regulators in the room, this is a very challenging topic,” Morrison said. “For the legislators in the room, use your regulators as resources.… We want to make sure everyone who is in Ohio is doing so legally and in a corporate, responsible way.”

A dual-currency model

For those unfamiliar with sweepstakes operators, the model is predicated on a dual-currency apparatus. There is a major distinction between a “virtual coin”, which can be obtained free of charge and “virtual cash”, another currency on the platforms. While users may receive hundreds of coins each week, only the latter is redeemable for real money.

The sweepstakes model has become increasingly prevalent across a wide variety of online gaming contests. Virtual Gaming World (VGW), an online sweepstakes casino and poker operator, has been ordered by multiple states to cease operating. Another operator, Kickr Games, provides options ranging from video slots to scratch games, as well as blackjack and stud poker.

Read the full story here.

Casino Reports is an independently-owned publication dedicated to covering the regulated US online
casino/igaming industry, with news, features and original reporting on industry happenings, business, legislation, regulations and more.