There is anticipation from the industry that we will see a myriad of new cease and desist orders dished out to various sweepstake operators imminently.
It comes as scrutiny of the vertical continues to intensify, with the American Gaming Association underlining the need for a tightening of the regulatory framework around the sector.
Howard Glaser, the Global Head of Government Affairs and Legislative Counsel at Light & Wonder, took to Linkedin to state that he “has a high degree of confidence that numerous new cease and desist orders have been issued by multiple states to sweepstakes casinos and sportsbooks”.
Glaser continued: “Were I counselling investors and vendors in the sweeps sector, I would advise to specifically ask for pending regulatory actions and investigations as they occur.
“As unlicensed entities, there is no requirement for sweeps operators to disclose enforcement actions. It’s prudent for investors and business partners to understand undisclosed risks.
“I suspect there will be a cornucopia of litigation around this as irrational exuberance around a too good to be true product – ‘oh look- gambling without gambling laws!’- fades.”
Furthermore, California was also engulfed in a sweepstake casino lawsuit as igaming law expert, Daniel Wallach revealed on X.
That case takes aim at VGW and Chumba Casino, which the plaintiff alleges is an “illegal gambling website”.
The case also laid out that California ‘aggressively regulates all forms of gambling’, in order to prevent consumers from being cheated by professional gambling operations.
According to the case put forward by the plaintiff: “VGW’s hosting and facilitating of the illegal slots and other games of chance constitute an unfair and unscrupulous business practice because – among other reasons VGW targets and exploits vulnerable and addicted players while falsely denying that Chumba Casino involves gambling.”
Recent criticism of the sector from the AGA saw the body warn: “The lack of regulatory oversight presents many risks for consumers as well as the integrity and economic benefits of the legal gaming market through investment and tax contributions. These sweepstakes-based operators have weak (if any) responsible gaming protocols and few, if any, self-exclusion processes.”
This was however rebutted by VGW Chief, Laurence Escalante who emphasised the vital nature of the ‘the best in class’ financial crime controls utilised by the sector.
Ontario’s fall 2024 budget measures introduced in October included a provision that could see a seismic change to gaming regulation in the province.
While Bill 216, the Building Ontario For You Act, 2014, adjusted the province’s expectations for net profit from gaming as part of its 2024 fiscal review and future outlook, it also introduced Schedule 9 which concerns the status and operation of iGaming Ontario (iGO).
This provision will allow iGaming Ontario to breakaway from its parent organisation, the Alcohol and Gaming Commission of Ontario (AGCO), ending the two firms’ parent-subsidiary relationship.
Since iGO began operations in July 2021, the organisation has been a subsidiary of the AGCO under the Alcohol and Gaming Commission of Ontario Act, 2019.
Yet as a result of Schedule 9, iGO will become an entirely standalone corporation without share capital. iGO specified that it will be a fully independent board-governed agency.
Bill 216 passed first reading third reading on 6 November and received Royal Assent the same day. The iGaming Ontario Act will be proclaimed in early 2025, a representative from the Ontario Ministry of the Attorney General told Canadian Gaming Business.
This spokesperson also told the publication that this change has been introduced to address a concern of a conflict of interest raised by Ontario’s Auditor General.
“Once proclaimed, the Act would also dissolve the parent-subsidiary relationship between AGCO and iGO,” confirmed the spokesperson of Doug Downey‘s office.
“This change would strengthen iGO’s governance and accountability structure and contribute to the continued success of Ontario’s thriving igaming market by positioning the agency as a competitive employer and addressing a conflict-of-interest concern raised by the Auditor General.”
