It’s been a fact of life that as soon as a law is created, people have tried to find creative ways to get around it. And banning things outright has very much the same effect. One only has to look back at the days of alcohol prohibition to see this in action. In the US, there has always been something of a two-pronged approach to gambling. While in Las Vegas, the country has arguably the global capital of the activity, in many states other than Nevada, the activity is either banned outright or faces fairly major restrictions.
Yes, the Supreme Court’s historic 2018 decision to legalize sports gambling has led to some easing of restrictions, but there’s still a long way to go until the liberal approach of a country like the UK can be reached. Online casinos have been steadily growing in popularity across the rest of the world, but at the present time, they are only fully legal in seven states: New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut and Rhode Island.
Casino operators in other states, however, have found a loophole in the law that they believe allows them to operate without breaking it. But it may be a loophole that is soon to be closed if various state governments have their way.
Sweepstakes casinos explained
Gambling laws in the US generally take the form of banning activities in which money is used in the hope of winning more. However, there are no laws against games of chance that are played for fun and require zero financial investment. This is the principle behind the sweepstakes casino. These are also sometimes called social casinos, and this gives a good insight into what they are, on the surface at least, all about.
Anyone who signs up at a sweepstakes casino is awarded a certain number of gold coins. These have no monetary value at all. They are simply tokens that can be used as virtual stake money in games. Just like online casinos, there are also welcome bonuses for players. These take the form of a set number of gold coins and sometimes free spins on slot games.
Then there is a second kind of currency called sweeps coins. These don’t have an actual monetary value either, but once a player has amassed enough of them, they can be converted into prizes and other rewards, including gift cards and cash.
An online casino in all but name
In terms of the sorts of games that players can enjoy in sweepstakes casinos, these are largely identical to the ones in online casinos. There are always plenty of slots to play as well as all of the classic table games like roulette, blackjack and baccarat. There are also special sweepstakes games along with bingo and variations like Keno. More and more sweepstakes casinos are also starting to offer live casino play, too. Recently, there has even been some convergence between them and online casinos. For example, Stake has moved into sweepstakes casinos and is enjoying big success.
However, for all of their popularity, there may now be some clouds gathering on the horizon for sweepstakes casinos in many of the states where they are currently thriving.
Sweepstakes in the crosshairs
Currently, there is legislation being drawn up in Massachusetts that aims to expressly outlaw sweepstakes casinos, defining them as any online operator that simulates a casino or sportsbook using the dual-currency system already outlined above.
The proposed law goes even further and will criminalise any individual who supports or assists in the running of a sweepstakes casino. Proposed sanctions are fines of between $10,000 and $100,000, as well as the withdrawal of any gaming licenses that operators may hold.
Already, states including New Jersey, Montana and Connecticut have banned sweepstakes casinos, with legislation also currently going through due process in Nevada, New York State and California. In the first of these states, New Jersey, there is also a lawsuit going through that targets both Google and Apple for hosting sweepstakes payment apps and effectively acting as enablers for these kinds of casinos.
So it seems certain that very soon there will be a severe contraction in the number of sweepstakes casinos available for would-be American gamblers.
A brighter horizon?
Ironically, the possible demise of sweepstakes casinos could herald a brighter future for online operators. The other side of the Massachusetts plan to ban the former is linked to introducing legislation to permit the latter. Whether other states act in the same way remains to be seen, but many are hoping that this may be a catalyst that could transform online gambling in the country.
It’s early days, certainly. But as the ever-increasing number of states that allow sports betting shows, once one acts, others soon start to see the possibilities for themselves.