Sweepstakes games, or social casinos, continue to face problems in the US. The latest is a lawsuit brought against Stake in California. The suit, filed by Dennis Boyle, alleges that Stake fraudulently skirts state-level gambling regulations to provide illegal gambling.
A spokesperson for Stake has responded, stating: "Courts in the state have generally ed the legality of social casino and promotional sweepstakes models like ours, and we’re confident the legal process will reflect that."
Recent Legal Wins
Sweepstakes games have received a few wins in the legal system. While neither provides a definite legal ruling on sweepstakes games, they favor the exploding industry.
In New Jersey, a RICO lawsuit against High 5 Casino and tech giants Google and Apple was voluntarily dropped by the plaintiff. Why the plaintiff dropped their case isn't clear.
In Georgia, a class action lawsuit against VGW was dismissed because the court did not have the standing. The judge in that case stated: "The Defendants (VGW) could not reasonably have expected to be haled into court in Georgia (or any state, for that matter), solely because their websites are interacted with by residents of the state."
There is another lawsuit in the Georgia legal system brought against VGW by the same plaintiff that is still active, but VGW is arguing that the court does not have standing. A ruling that could once again go in their favor based on the previous decision.
Those legal wins have offered sweepstakes games a sigh of relief, as they face mounting legal challenges.
Rushing To Conclusions
Those mounting legal challenges come as the American Gaming Association loudly lobbies lawmakers and the court of public opinion to crack down on sweepstakes games, pointing out that social casinos exist outside legal frameworks drawn up by the states.
And states are likely listening. New York's Senate Bill 5935 would do the same in the Empire State.
The Social and Promotional Games Association (SPGA), an advocacy group for social and promotional gaming platforms, is pushing back on all fronts. They believe New York's SB5935 "recklessly mischaracterizes sweepstakes gaming" and that New Jersey's Bill 5447 would undue a progressive view of gaming and replace it with "outdated prohibition".
SPGA's point on Bill 5447 is a good one. Why rush to prohibition before considering bringing sweepstakes in line with other regulated entities? The state can benefit from regulating this exploding industry rather than simply banning it and pushing its citizens who use these platforms to use offshore providers.
