AGA releases memo on potential sweepstakes gaming threats
The Association expressed concerns regarding how unlicensed online casinos and sportsbooks are using sweepstakes games to potentially get around regulations and laws.
The American Gaming Association (AGA) has sent out a memo to gaming operators regarding the potential harm of sweepstakes gaming for consumers.
The AGA has also confirmed the validity of the memo to Gaming America.
The Association stated in the memo that there are “an increasing number of entities that have intentionally designed business models to circumvent or exploit ambiguity in state gambling laws and the regulatory frameworks within which the legal gaming industry operates.”
According to the memo, offshore sportsbooks and online casinos have blatantly ignored the laws and regulations put into place to ensure responsible gaming.
“In the brick-and-mortar environment, unscrupulous operators have used ‘skill’ as an artifice to flood jurisdictions with unregulated slot machines. In the online space, some unlicensed casinos and sportsbooks are thriving by employing a ‘sweepstakes-based’ model to potentially skirt gaming laws and regulations,” AGA said in the memo.
Sweepstakes casinos offer traditional casino games such as slots, roulette, blackjack or poker among others, which allow bettors to seemingly play for free or buy virtual currency to further their gameplay.
Sweepstakes sportsbooks are typically “free-to-play sportsbooks” where people can bet on each other’s wagers, or stake bets directly with one another. Many of these operators use two different types of free tokens or currency that can be used to wager, and users can exchange them for real money when won through gameplay.
“The lack of regulatory oversight presents many risks for consumers as well as the integrity and economic benefits of the legal gaming market through investment and tax contributions. These sweepstakes-based operators have weak (if any) responsible gaming protocols and few, if any, self-exclusion processes,” AGA said.
“There is no independent product testing to ensure basic fairness to players, and although many claim players must be 18+, age verification procedures, if they exist, are often questionable. The opaque nature of these operations also presents a prime opportunity for illegal activity and enriching bad actors.”
The AGA called for gaming regulators and state attorneys to investigate platforms that offer casino games or sports betting under the sweepstakes gaming model to ensure those operators are in compliance with respective laws and regulations. If found to not be correctly following these procedures, the AGA stated regulators and attorneys should begin to take “appropriate action.”
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