During a G2E education session Tuesday, Light & Wonder Global Head of Government Affairs & Legislative Counsel Howard Glaser said that sweepstakes forms of gambling are experiencing their “last gasps.” But the real question is what comes next.
“This growth in such a short period of time isn’t going away,” said Glaser during the session “Sweepstakes Casinos Today: Where We Stand and What Comes Next” at G2E in Las Vegas. “And that’s the consumer desire to play real-money gambling online. There’s a strong appetite to do so and scarce legal opportunity to meet that demand. That underlying issue isn’t going away.”
During the session, moderated by former director of the New Jersey Division of Gaming Enforcement David Rebuck, the panelists were united in opposition to both sweepstakes and prediction markets. They all seemed to agree that the death knell for sweepstakes is imminent.
Daniel Wallach, an expert in gaming law and the founder of Wallach Legal, noted that over 125 cease-and-desist letters have been sent to sweepstakes operators from regulators in 11 states.
“Not one of those letters was ever challenged and they largely have been complied with,” Wallach said, adding that letters to prediction markets have largely been defied or ignored.
“So the failure to challenge over 100 CD letters is almost tantamount to an admission of liability. They understand the results perfectly well. And the reason why is not because of these cease-and-desist letters, but because they’re essentially the successor to the internet sweepstakes gambling cafe phenomenon.”
(Via internet gambling cafes, customers can purchase a product such as internet time and receive entries to play online games. The cafes are often banned by states; courts have determined their activities are illegal gambling, not legitimate sweepstakes).
There seems to be an appetite across the country to ban sweepstakes. Shawn Fluharty is the minority whip of the West Virginia Senate, Play’n Go Head of Government Affairs, and the current president of National Council of Legislators from Gaming States. In his home state under the auspices of Attorney General John McCuskey, getting rid of sweepstakes was a priority.
“One of (McCuskey’s) first actions as attorney general was to go after these companies,” Fluharty said. “You’re seeing it across the country and it’s going to facilitate (nixing sweepstakes), because it really puts some teeth in this.”
American Gaming Association’s Vice President Government Relations Tres York said the organization’s efforts to combat sweepstakes began with educational efforts with regulators to inform them of the dangers. That resulted in the increase of cease-and-desist letters across the country.
“This entire business model is essentially a too-clever-by-half attempt to offer online casino gateways to the public,” York said. “The so-called sweepstakes model that runs all of the time isn’t like any traditional sweepstakes model I’ve ever heard of.”
Panelists also discussed recent legislation passed in California that prohibits sweepstakes. The bill, which passed unanimously – Fluharty joked that no votes against a bill never happens – awaits the signature of California Governor Gavin Newsom.
Glaser noted that Victor Rocha, conference chairman for the Indian Gaming Association, posted on social media “Don’t mess with the California tribes – except he didn’t use the word ‘mess.’”
“But in California, this is an existential issue,” Glaser said. “It’s the exclusivity and sovereignty to conduct gaming in the state. This was a challenge to that, offshore and some onshore, that is available 24 hours a day, seven days a week, for every resident in the state that has a phone. This is a direct threat in Indian Country. Congratulations to the tribes for getting as far as they did, whether the governor signs it or not.”
