Sweepstakes casino bans will take effect in Indiana and Iowa on July 1. Several operators have announced their withdrawal from Indiana, including Modo.us, McLuck, Jackpota, Baba Casino, PlayFame, ACE Casino, SpinBlitz, and Hello Millions.
To this date, Chumba Casino, Pulsz, Stake.us, and High 5 Casino have not announced withdrawals from the Hoosier State. Indiana players still have the ability to sign up for accounts and use sweeps coins at those sites. State lawmakers have suggested that customers should withdraw winnings from sweepstakes sites before the ban goes into effect.
Indiana House Bill 1052, signed into law by Gov. Mike Braun on March 12, bans multi-currency websites that simulate casino betting, sports wagering, or lottery gambling. When the ban goes into effect on July 1, operators and payment processors will face fines up to $100,000 per violation.
The bill, signed into law by Gov. Mike Braun on March 12, explicitly bans online slots, table games, bingo, sports wagers, and poker. It also bans sweepstakes-backed lottery-style games, though exceptions are made for the Indiana state lottery and peer-to-peer poker games. The bill allows state officials to fine operators and service providers in violation of the law up to $100,000.
In May, Iowa legislators passed Senate File 2889, which goes into effect on the same day. SF 2289 gives the state’s Racing and Gaming Commission the authority to send cease-and-desist letters and seek court injunctions against operators. The sweepstakes casino ban makes violations a Class D felony. Violators face up to 5 years in prison.
Operators have taken different approaches to the new laws. Most have left the markets, while some appear to be waiting until the last moment to exit. In other states, operators have fought legal action in court. One prominent operator, ARB Interactive, still seeks legislative support.
Patrick Fechtmeyer, CEO of ARB Interactive, stated in a June 9 interview with the Social Gaming Leadingship Alliance (SGLI) that his company continues to pursue pro-sweepstakes casino legislation. Fechtmeyer, whose company owns Modo.us and Publishers Clearinghouse, supports the Sweepstakes Modernization Act.
ARB Interactive is taking a fifty-state approach. In response to a question about New York Sen. Joseph Addabbo’s interest in similar legislation, Fechtmeyer said his group is willing to talk to any lawmaker who wants to speak to them.
US gambling laws traditionally have required gaming activities to have three elements for the definition of gambling to be met: an element of chance, prizes or rewards, and consideration. If states deem a game to have a sufficient level of skill, then it is not considered gambling under the law. Sweepstakes sites are chance-based, so they qualify on this account.
Most offer prizes or something of value, which is involved in the legal definition of gambling in most states. Cash, gift cards, or sweeps coins that can be exchanged for US dollars all qualify as something of value. Thus, sweeps casinos satisfy this part of the definition.
It is the “consideration” — a wager or stake the player risks losing — where sweepstakes sites can debate if there is a legal loophole. Traditional sweepstakes offered by the Publishers Clearinghouse or McDonald’s allow contestants to enter the contest without paying a cost. Most sweepstakes sites offer the ability to collect sweeps coins without paying for them, whether it is through daily giveaways or a mail-in request.
