One of the many sweepstakes casinos that received cease-and-desist letters in Louisiana last month has officially shut down its operations in the state.
Chanced, in its June 30 terms and conditions update, added Louisiana to its list of excluded markets. Its sister sweeps casino, Punt, uses the same terms and conditions and, thus, has also left Louisiana. The other jurisdictions on their exclusion list are:
- Idaho
- Michigan
- Nevada
- Kentucky
- Washington
- Montana
- West Virginia
- Delaware
- Connecticut
- New York
- Washington, DC
Many of the sweeps casinos to receive Louisiana cease-and-desist letters still do not have that state listed among the excluded markets in their terms and conditions, although that doesn’t necessarily mean that they are still operating their sweepstakes platforms in Louisiana.
WOW Vegas, for instance, recently informed customers it will pull out of Louisiana on July 11 and it still has not added the state to its excluded list in its terms and conditions.
Louisiana AG: Don’t operate here, or we may take your profits
The Louisiana Gaming Control Board sent out the 42 cease-and-desist letters.
In a recently filed legal opinion, Louisiana Attorney General Liz Murrill followed up on the LGCB’s letters by asserting that online sweepstakes casinos are illegal under current Louisiana law — and she threatened legal action against those that continue to operate.
“Online ‘sweepstakes casinos’ allege that they are not conducting internet gaming or gambling; yet, they offer games such as poker, slot machines, blackjack, roulette, bingo, raffles, and other casino-style games using a dual currency system involving, what at least one company calls, ‘Gold Coins’ and ‘Sweep Coins,’” Murrill wrote. “While the operators claim these games are promotional in nature, users may purchase ‘Gold Coins’ and receive ‘Sweep Coins’ ‘as a bonus,’ typically in the same dollar amount as the purchase, which can then be used to play games and be redeemed for cash or valuable prizes.
“These operations are promoted year-round, are not in promotion of some legitimate business operation, feature jackpots and wagering elements, pay tables, and profit from user participation by selling tokens or credits.”
Murrill later elaborated on the enforcement options at her office’s disposal if an operator is found to be offering illegal online gambling, including “injunctive relief, restitution, disgorgement of profits, sequestration of asserts, and civil penalties.”
Sweepstakes casinos and the two main sweeps advocacy groups, the Social Gaming Leadership Alliance and the Social and Promotional Games Association, have long insisted their gaming platforms follow legal sweepstakes structures followed by other regulated businesses, such as Marriott with Marriott Rewards and Hilton with Hilton Honors.
“[Sweeps] platforms use the same promotional frameworks relied upon by companies like Microsoft and Marriott, and are already equipped with age-gating, geolocation, and robust fraud prevention,” said an SPGA spokesperson in a recent press release regarding the passage of a sweeps ban bill in New Jersey.
Murrill disagreed with the comparison in her legal opinion.
“Legitimate sweepstakes and rewards programs — like those run by e.g. McDonald’s or Starbucks — operate with clear rules, offer entries without purchase, and offer non-monetary or time-limited promotions designed to market a good or service,” she wrote. “Illegal ‘sweepstakes casinos,’ on the other hand, are not offered in furtherance of a legitimate business of goods, operate persistently, target vulnerable populations, require purchase to engage, and allow conversion of winnings into cash.”
Sweeps casinos and the SGLA and SPGA have also consistently maintained most of their customers use the free-to-play platforms, and that no purchase is required to play with either currency — Gold Coins or Sweeps Coins — as they are often rewarded as daily login bonuses.
Can a sweeps operate challenge an AG’s enforcement?
Yes, a sweepstakes casino operator can challenge an Attorney General’s legal opinion in court. Because it is just that — an opinion. (Albeit, one from a legal leadership figure whose opinion may be nearly impossible to override in a court.)
Still, if a sweeps casino is being threatened with legal action as a result of an interpretation of Louisiana law it disagrees with, it can take the legal challenge to court.
However, you likely won’t see that happen much, if at all. As mentioned earlier, the burden of proof to override an Attorney General’s interpretation of the law is massive. And, two, the costs of fighting that type of legal battle may make the endeavor not even worth it.
