Sweepstakes Games Industry Takes Massive Punch From US Lawmakers

Tuesday was easily the worst day for the sweepstakes industry in America, with bannings and cease-and-desist letters. Here's a breakdown of what took place for sweepstakes games in the US.

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Key Highlights
+ Bans: Connecticut signs law SB1235 into law, banning sweepstakes games. New York has passed anti-sweepstakes bill S5935 to Governor Hochul to sign into law.
+ Letters: After vetoing an anti-sweepstakes bill, Louisiana sends out 40 cease-and-desist letters to sweepstakes operators. Mississippi also sent out letters to sweepstakes operators.
+ Next Domino To Fall: New Jersey could be the next state to ban sweepstakes games with two bills in the legislative system.

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Connecticut And New York Ban Sweepstakes Games

This tough period for sweepstakes games began on Friday when Connecticut Governor Ned Lamont signed SB 1235 into law. The bill outright bans sweepstakes and promotional games such as simulated casino gaming or sports wagering.

The Social Gaming Leadership Alliance (SGLA) called the ban "hastily passed on incomplete information" and vigorously defended its members.

"SGLA refutes claims that players routinely lose money without recourse, calling such accusations 'categorically false.' The bans, they argue, cut off residents from “popular, free-to-play online games enjoyed by millions nationwide."

-SGLA press release

New York also passed its own anti-sweepstakes bill this past week with bill S5935, which was later substituted for A6745a. The bill passed both the Senate and the Assembly easily and will now be forwarded to Governor Kathy Hochul to sign into law.

The Social And Promotional Games Association (SPGA) is calling on Governor Hochul to veto the bill, much like Louisiana Governor Jeff Landry did (more on Louisiana later). The SPGA argues that this law stifles innovation.

"Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle."

-SPGA press release

Louisiana and mississippi send Letters

While sweepstakes games received a win in Louisiana after Governor Landry vetoed SB181, that win was short-lived. On Tuesday, the Louisiana Gaming Control Board (LGCB) sent out 40+ cease-and-desist letters to sweepstakes operators, including VGW.

That's a tough pill to swallow. Specifically, after groups like the SGLA, led by VGW, thanked Governor Landry for his decision to veto SB181.

In a not-so-hospitable move, Louisiana's neighbor, Mississippi, followed suit, sending cease-and-desist letters of its own to ten sweepstakes operators, including VGW, stating these operations violated Mississippi law, which prohibits "online casino-style gaming and sports wagering."

Is New Jersey Next?

The Garden State is the next likeliest source for new anti-sweepstakes legislation, with two different bills working through the legislative process. The Assembly is debating AB5447, which was referred to the Consumer Affairs Committee at the start of May but hasn't been touched on since.

The Senate is reviewing its own anti-sweeps bills, SB4282, which was referred to the Appropriations Committee at the end of May.