States Are Stepping Up Enforcement Of Gambling Legislation

Give them an inch they'll take a foot.

Since 2018, state after state has rolled back restrictions on gaming specifically to allow sports gambling to occur legally within their jurisdictions. With legalization came regulations and taxation, meant to not only control the practice of sports gambling but to fund harm reduction programs as well.

Generally, that's been successful, with states pulling in billions in tax revenues with $2.7 billion collected in 2024 while harm reduction programs are seeing a big increase in funding.

The NAADGS states that public funding for problem gambling services has increased by 28%, from $73 million in 2016 to $94 million in 2021. Missouri, the latest state to legalize sports gambling, dictates that $5 million per year from sports gambling tax revenues be spent on problem gambling programs.

But as states embraced a new collaboration with sports gambling other operators have started to push the envelope of what is and isn't gaming. Finally, states are pushing back.

Sweeping Actions On Sweepstakes Gaming

In a landslide 44-1 vote the Mississippi Senate approved Bill 2510, a bill that will ban online sweepstakes gaming in The Magnolia State.

Sweepstakes gaming is growing in popularity, occupying the grey space in the legalized gaming world. While the games are traditional slot and table games, the currency used to wager isn't money - although these digital currencies can be bought with and redeemed for money.

These games fly in the face of regulations imposed by states on legal gaming operators and as such - just like Mississippi did emphatically - states are fighting back.

States like New York have vowed to analyze the practice with New York Gaming Commission chair Bryan O'Dwyer saying in a January 27th Commission meeting: "I can assure my fellow Commissioners and the public that if this activity (sweepstakes gaming) continues and is found to be in violation of New York State's gaming law that we will do everything possible to assure that that law is protected and respected. I will inform the Commissioners at our next meeting as to exactly what we are going to be doing, what the law enforcement officers are going to be doing in terms of those activities."

In Maryland, the state sent cease and desist letters to sweepstakes operators and went so far as asking payment processors to block access to these operators.

BREAKING: The Maryland Lottery has sent cease-and-desist letters to 11 illegal online gaming operators; 6 responded, 0 agreed to block access. Follow-up letters are being sent and initial letters to payment processors are in progress, demanding they block access. (h/t @FSDiMasi). pic.twitter.com/TxJvhuSLAk
— Daniel Wallach (@WALLACHLEGAL) January 15, 2025

States can't have these operators playing in the grey areas after spending so much political capital setting up rules and regulations for legal gaming, so they're stepping up and enforcing the frameworks they devised.

Each state will tackle this new challenge differently, but don't be surprised if you see a copycat approach with slow-to-react states reaching for a Mississippi playbook on this. Sweepstakes gaming is popular but perhaps not for long.