Pennsylvania has become the latest state to crack down on sweepstakes casinos.
The Pennsylvania Gaming Control Board (PGCB) revealed in a Gaming Oversight Committee hearing on Monday that it has issued 18 cease-and-desist letters to sweepstakes casinos operating in the Keystone State.
None of the operators hold interactive gaming licenses from the PGCB. The sweeps sites are free-to-play social casinos with a sweepstakes-based prize system. Such gaming companies are legally able to operate in gray area.
However, an increasing number of state legislators and regulators are aiming to close that loophole.
Pennsylvania Gaming Oversight Committee Suggested Changing State’s Gambling Language In Gaming Act
According to Pennsylvania law, the PGCB does not have the authority to take legal action or act against these companies as it could against real-money online casinos and sports betting operators. It can only issue cease-and-desist letters, but all 18 recipients have reportedly complied with the order.
Chief Counsel Steve Cook, who spoke at the Gaming Oversight Committee hearing, said sweeps operators will continue to pop up because the state law’s gambling language is vague, allowing offshore gaming platforms to circumvent it.
During the hearing, Cook also recommended altering the definitions in the Gaming Act. That would essentially create a pathway for the state to either ban or regulate sweepstakes casinos. Cook said:
“Unfortunately, in the area of interactive gaming, we are significantly hamstrung by the specific language of our enabling statute. Specifically Chapter 13B of the Gaming Act includes sections that appear to ban online gaming by unlicensed operators. These prohibitions ultimately come into conflict, however, with the definitions found in the Act.”
Cook Cited Commonwealth Court’s Pro-Sweepstakes Decision
In addition, Cook mentioned the Commonwealth Court‘s decision to rule the games as legal back in December 2023, which has had a negative effect on the PGCB’s power in investigating unlicensed operators like sweepstakes casinos. He added during the hearing:
“What the Commonwealth Court held, with very similar language in the skill games debate, was that this language wasn’t nonsensical, which I think it is.
“This language serves to prohibit and make clear that the Gaming Board only has control and authority over people licensed by it, not outside entities doing something, which is arguably illegal.”
Altering Gaming Act Would Give PGCB More Authority
Changing the language of the Gaming Act would give the PGCB more authority to regulate sweeps gaming.
Russ Diamond, Chairman of the Gaming Oversight Committee, also said changing the language of the law would mean the Committee must prepare for sweeps operators to find ways to work around the new language. Diamond said:
“We have to do it in a way that not just takes care of what’s going on today, but we have to try and anticipate what’s going to go on in a year, or two years, or five years, or 10 years [from now]. That’s very difficult for us to do because it’s hard to imagine what people are going to come up with.”
Sweepstakes operators have been able to operate as online gaming platforms in Pennsylvania because the sites use a promotional sweepstakes model rather than a real-money gambling framework.
These casinos offer a chance to participate in online casino games and potentially win prizes. Instead of real money, they use their own form of currency, usually known as Gold Coins (GC) and Sweeps Coins (SC).