The Nevada Legislature is reviewing a piece of legislation intended to further penalize illegal gambling operators and companies that operate in gray area, which include online sweepstakes casinos.
Nevada Senate Bill 256 Would Penalize Unlicensed Operators
Sen. Rochelle Nguyen (D-3) has introduced Senate Bill 256, a measure that requires “the disgorgement of any profit, gain, gross receipt or other benefit related to certain illegal gaming activities.”
Although SB 256 does not specifically state, “illegal online sweepstakes casinos,” the bill does mention unlicensed operators. Virtual Gaming Worlds (VGW) Holdings would fall under that category.
VGW allows players across multiple sites to engage in social casinos, virtual casino-style games for free, while allowing them to purchase virtual Gold Coins that can later be redeemed for cash prizes.
Gold Coins and Sweep Coins are available for players to purchase, but neither currency holds real-world cash value. However, Sweeps Coins can be used to win prizes, including cash rewards. Sweepstakes casinos label the games “promotional sweepstakes” rather than casino gambling.
“This is a crucial issue that affects not only the credibility of our gaming regulations but also consumer protections and state revenues,” said Nevada Legislative Intern Janice Wong during a public Senate Judiciary Committee hearing on the measure.
“With the rise of online gaming apps, we’ve seen an increasing number of unlicensed platforms operating in the shadows accepting illegal wagers, engaging in fraudulent practices, and profiting outside the bounds of our regulatory framework. These bad actors not only undermine our legal gaming industry but also put our consumers at risk.”
SB 256 States That Profits From Violators Would Be Allocated Toward The State’s General Fund
SB 256 would also protect consumers and the regulated gaming industry by forcing illegal gambling operators to forfeit profits and benefits made from their illicit operations.
The bill states that any profits from violators to be allocated toward the Nevada General Fund.
In addition, the measure levies stricter criminal penalties for hosting an illegal gambling operation. SB 256 calls for individuals who violate or conspire to violate its provisions to be guilty of a Category B felony with potential “imprisonment in state prison for a minimum term of not less than one year and a maximum term of not more than 10 years.”
Any person who violates or attempts to violate SB 256’s provisions faces up to a $50,000 fine as well.
The bill also penalizes residents who failed to report or pay for the licensing fees and taxes imposed by the Nevada Revised Statutes. Those who fail to report or evade licensing fees and taxes are guilty of a Category C felony.
“This bill ensures that everyone plays by the same rules,” added Wong. “Accountability is important. If an online gaming app engages in illegal activities, they should not be allowed to profit from it. This bill sends a clear message – if you operate illegally, you will be held accountable.”