The battle over sweepstakes casinos heated up considerably this week when New York State Attorney General Letitia James announced that she sent cease-and-desist orders to 26 NY-facing sweepstakes casinos. It’s a big move from a major law enforcement unit that does not bode well for the future of sweepstakes casinos and their journey through a licensing loophole.
With a tax rate of 51 percent on operators New York has the highest gambling tax in the country. Now the New York State Gaming Commission (NYSG), with the help of the Attorney General, is vigorously enforcing its claim on tax revenues by shutting down as many sweepstakes casinos as it can find.
NYSGC Chairman Brian O’Dwyer enthusiastically supported the Attorney General in comments reported on by SBC Americas saying, “These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful. I have been very vocal about the need to crack down on these operations, and I am thrilled that Attorney General James has taken this significant step to eradicate the illegal gambling market.”
As of this writing, Fliff, Fortune Coins, High 5 Casino and Sportzino. VGW’s Chumba Casino, Global Poker and Luckyland had all complied with the order. Though most of the sweepstakes casinos contacted by the Attorney General are expected to comply, none of them are happy about the situation.
That unhappiness was expressed in a statement issued by the Social and Promotional Games Association saying, “It’s disappointing to see a blanket enforcement action taken without meaningful dialogue or effort to distinguish between compliant companies and truly illegal operators. This approach stifles innovation, limits consumer choice, and disregards the legal status of sweepstakes promotions.”
Given the scale and seriousness of the New York operation, it’s clear that the days of sweepstakes casinos rolling through a licensing loophole are rapidly coming to a close.