Amidst a backdrop of growing scrutiny and regulatory pushback, the sweepstakes casino sector has become a battleground for industry giants, exemplifying broader challenges in U.S. gambling regulation. The American Gaming Association (AGA) and the Social and Promotional Gaming Association (SPGA) have locked horns over the operational and legal nuances of these platforms, suggesting a significant pivot in the dialogue surrounding non-traditional gambling avenues.
At the recent State of the Industry Meeting hosted by the AGA, Chief Executive Bill Miller took a firm stance, describing the sweepstakes-based social casino platforms as a key component of what he perceives as a broader illegal gambling landscape in the U.S. According to Miller, these operations cleverly navigate through legal loopholes to avoid direct classification as gambling, yet offer services that many would inherently recognize as such, lacking the regulatory and safety frameworks typical of authorized betting establishments.
AGA’s stance on legal grey areas:
The AGA argues that the clever positioning of sweepstakes operations skirts the traditional definitions of gambling, which undermines the trust and regulatory progress made in the gaming industry. “Sweepstakes operators… deploy legal acrobatics to avoid calling themselves betting or gambling, only then to offer products that most universally would agree are gambling yet without the safeguards and regulatory constraints,” stated the AGA during the meeting.
In contrast, the SPGA quickly countered these claims, defending the legality and operational integrity of sweepstakes casinos. “In its recent State of the Industry presentation, the AGA trotted out many of the same tired canards about social sweepstakes that self-interested critics have peddled for months,” the SPGA articulated in a robust defense. Highlighting adherence to stringent legal frameworks, the SPGA emphasized that its members operate under laws that sharply contrast with those governing unregulated, black-market operators.
As NEXT.io reports, Further defending its position, the SPGA pointed to its published Code of Conduct, which enforces age and location verification, KYC, and AML policies. “And most social sweeps sites have tools in place to allow consumers to control their play and pay some form of state tax, such as sales or corporate tax,” added the SPGA, suggesting a commitment to responsible gaming.
Economic impact and industry responses:
The debate comes against the backdrop of significant economic stakes. The AGA highlighted a staggering $109 billion allegedly wagered through illegal and unregulated channels in 2024, which purportedly cost the U.S. approximately $17.3 billion in lost revenue. This revelation has added fuel to the fire, with legislative bodies like the Mississippi Senate moving to restrict these platforms, marking a first in the nation.
Concurrently, the industry’s leading player, VGW, announced a policy shift by raising the minimum age for players from 18 to 21, reflecting a response to the increasing scrutiny and a gesture towards more stringent self-regulation.
As sweepstakes casinos continue to stir controversy, the sector remains at a crossroads. With a number of class action lawsuits and legislative measures emerging, the future of these platforms hangs in the balance. Both the AGA and SPGA remain entrenched in their positions, underlining the ongoing struggle to define and regulate non-traditional gaming models within the evolving landscape of U.S. gambling laws.