The National Council of Legislators from Gaming States (NCLGS) has unveiled a draft model iGaming legislation with a purpose of assisting U.S. states in regulating online gaming.
NCLGS’ Model Internet Gaming Act Creates Effective Regulatory Framework, Promotes Fairness Of Internet Gambling Operations
Regulating iGaming also involves banning sweepstakes casinos, per the NCLGS. The Model Internet Gaming Act includes multiple potential policies for state legislators, regulators, and stakeholders.
According to the NCLGS, this model legislation is intended to create an “effective, comprehensive, and efficient regulatory framework” that promotes “public confidence and trust in the integrity of the regulatory process and the fairness of internet gaming operations.”
Model Internet Gaming Act Key Highlights
- Online gaming tax rate 15-25%
- Daily deposit limits of $20,000
- Credit card use banned
- Minimize celebrity endorsements that can potentially harm minors
The NCLGS recommended establishing a tax rate for internet gaming that will maximize revenues and allow for competitiveness with other gaming jurisdictions.
The model framework includes a tax rate for online gaming set between 15% and 25%, with an average of 19% observed across the U.S.
More importantly, credit card use is prohibited, individual deposits over a 24-hour period cannot exceed $20,000, and online sweepstakes games are explicitly banned under the draft.
However, deposits and withdrawals would still be allowed via debit cards, digital wallets, bank wires, and cash at casinos or approved retail locations. Only credit cards are prohibited under the draft legislation.
What Is An Online Sweepstakes Game?
An online sweepstakes game is defined as “any game, contest, or promotion, in which a prize is awarded based on chance, that is available on the internet and accessible on a mobile phone, computer terminal, or similar access device, that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, and simulates casino-style gaming, including but not limited to, slot machines, video poker, and table games, lottery games, and sports wagering.”
The penalty would be severe for those caught operating, conducting, or promoting sweepstakes games within the U.S. Repeat offenders would reportedly face increased fines, possible loss of gaming license, and potential imprisonment of up to two years.
“Any person or entity found in violation of this section shall be subject to a fine of not less than $10,000 and not more than $100,000 for each violation and subject to potential loss of gaming license,” the NCLGS states.
Model Internet Gaming Act Underscores Responsible Gaming
The framework also emphasizes responsible gaming practices, requiring each online operator to appoint a Responsible Gaming Lead who will ensure at-risk customers receive the right information and support.
Marketing guidelines in the draft include restrictions on using “characters, performers or influencers who primarily appeal to audiences under the age of 21.”
The NCLGS states:
“In crafting this document, we fully realize that each state has a unique gaming sector with disparate interests and concerns. Nonetheless, we believe the regulatory framework set forth herein may be a useful tool for consideration as states embrace the vast potential of internet gaming. Nothing herein shall be intended to regulate any aspect of tribal gaming, which is governed exclusively by the Indian Gaming Regulatory Act and individual state compacts.”
The proposed Model Internet Gaming Act was open for public comment until Dec. 31, 2024.