Louisiana Attorney General Liz Murrill issued a legal opinion on July 2 in which she stated that online sweepstakes casinos that offer dual-currency casino-style games constitute illegal gambling and are in violation of state law.
“Following a review of applicable Louisiana statutes and legal precedent, it is the opinion of this office that online businesses offering casino-style games — purporting to be sweepstakes or social gaming platforms — are operating in violation of Louisiana law. These activities constitute illegal gambling and illegal gambling by computer under multiple provisions,” Murrill wrote.
Murrill was responding to Sen. Rick Edmonds’ (R-7) request for an opinion from the AG on the legality of “online sweepstakes casino businesses” that continue to operate in the Pelican State.
Edmonds Referenced Senate Bill 181
The AG also noted that in Edmonds’ letter, he mentioned Senate Bill 181, the legislation to ban casino-style sweeps that was approved by the legislature earlier this year.
Louisiana Gov. Jeff Landry vetoed that bill two weeks ago, suggesting it was unnecessary because the AG’s office and the Louisiana Gaming Control Board (LGCB) is taking the necessary steps to shut down unregulated operators.
Within days of Landry’s veto, Murrill assisted the LGCB in issuing more than 40 cease-and-desist letters to online sweepstakes casinos and social casinos.
“These actions send a clear message,” LGCB Chair Christopher Hebert said in a release. “Louisiana will not tolerate illegal operators who put our citizens at risk and undermine the fairness and integrity of our gaming industry. We will continue to use every enforcement tool available to protect the public and uphold the law.”
Murrill Asserts Dual-Currency System Is Illegal Gambling
In addition, Murrill highlighted in her opinion that online sweepstakes’ dual-currency system allows users to purchase “Gold Coins” and receive “Sweeps Coins” as a bonus in the same dollar amount as the purchase.
Those “bonus” coins, she asserted, can then be used to play games or to be redeemed for cash or other prizes. That alone, she claims, falls within the state’s definition of illegal gambling and gambling by computer.
“These indicators include a casino-like environment, the perpetual duration of the games, the high payout percentages of online casinos, the restrictions on the consumers’ ability to redeem prizes, and customers valuing ‘sweepstakes entries’ more than the product, usually by immediately replenishing sweeps coin balances to continuing playing games after running through unsuccessful play,” she wrote.
Murrill Believes Sweepstakes Casinos Lack Appropriate Safeguards
Murrill also stated that sweeps casinos lack necessary age verification safeguards, do not geolocate players, have unacceptable “know your customer” controls, and are not permissible under state gaming statutes.
She added that although SB 181 “would have been a valuable tool in memorializing the illegality, strengthening enforcement actions, and holding entities accountable,” her office, the LGCB, and the state still have “the power to investigate” and “initiate both criminal and civil actions.”
Criminal penalties for illegal gambling operations, gambling by computer, and gambling by electronic sweepstakes device include up to five years imprisonment and a fine of up to $20,000, or both.