The legal landscape of sweepstakes casinos is undergoing rapid changes, raising concerns for industry stakeholders and gaming regulators. Free-to-play casino-style games continue to grow in popularity, and this is leading to lawmakers in various states to take action against sweepstakes operators.
Attorney Stephen C. Piepgrass Weighs In On Sweepstakes Casinos
In an exclusive interview with CasinoReviews.net, renowned attorney Stephen C. Piepgrass, a partner at Troutman Pepper Locke LLP, opened up on the mounting legal pressures and the uncertain future of these platforms. Class action lawsuits and regulatory scrutiny are becoming common issues for sweepstakes operators.
Unlike traditional online casinos, which operate under strict licensing requirements, sweepstakes casinos utilize a different business model that allows players to participate without engaging in real-money gambling. This legal gray area has kept them outside the traditional regulatory framework.
However, that could change in the future. Attorney Piepgrass explains that the “no purchase necessary” model has enabled sweepstakes casinos to operate, but it also makes them targets for legal action. With class action lawsuits on the rise, regulators are closely monitoring these platforms.
Piepgrass Says Sweepstakes Casinos Will Not Operate In Their Current Form In The Future
Piepgrass predicts significant changes in the years ahead, stating:
“Proponents argue that sweepstake casinos do not constitute gaming, and therefore cannot be regulated like traditional gaming operations. Critics, on the other hand, assert that the free play and sweepstakes aspects of the games are simply a pretext, with the real motivation for players being the opportunity to win money or other things of real value.
” … As an initial matter, proponents of sweepstakes casinos would take issue with the term ‘loophole,’ and would argue that they simply are complying with laws as they are currently written. They would say that if there is a perceived gap in a regulatory framework, it is the responsibility of state legislatures to address and close it.
“… In the long term, it is unlikely that sweepstakes casinos will continue to operate in their current form. Whether due to pressure from class action lawsuits or regulatory scrutiny, the industry is poised for change.”
Since ongoing legal battles are bringing negative attention to the industry, Piepgrass expects further scrutiny, evolving business models, and new compliance requirements in the future.
VGW Raised Its Minimum Age Requirement To Boost Legitimacy
Earlier this month, Virtual Gaming Worlds (VGW) Holdings announced a policy change to raise its minimum player age requirement from 18 to 21 for its sweepstakes sites. The rule went into effect on Feb. 19, and the policy was implemented to advance responsible gaming measures amid mounting regulatory pressure in several U.S. states.
VGW’s move marked the first time a large sweepstakes gaming operator decided to raise the minimum age limit of players, a move that may create a precedent for other businesses in the industry.
States like Connecticut, Maryland, and Mississippi are actively considering bills to ban sweepstakes gaming, while New York’s pending online casino legislation could drive such operators out of the market.