Virtual Gaming Worlds (VGW) is pulling its products from the Michigan market ahead of an anticipated crackdown on sweepstakes model casinos. The Michigan pullout impacts several VGW brands including the popular Chumba Casino, as well as Luckyland Slots and Global Poker.
At issue is the company’s sweepstakes casino, a model that’s commonly used by social casinos. In a sweepstakes casino, players purchase virtual chips that allow them to earn virtual money, Sweeps Coins in this case, which can be redeemed for cash and prizes. It’s a model similar to what unlicensed storefront casinos masked as video arcades use, and it’s not very popular with gaming regulators.
While sweepstakes model casinos are not currently barred from the Michigan market, regulators are drafting regulations that would likely ban them by the end of the year. Earlier this year, Michigan Attorney General Dana Nessel ordered Golden Hearts casino shut down. Nessel described his thoughts on sweepstakes casinos in comments reported on by PlayMichigan.com saying, “Unlicensed gaming robs our schools and our government of essential funding and leaves consumers unprotected,” Nessel said in a release. “When companies like Golden Hearts attempt to circumvent Michigan’s gaming laws, they create the false impression that their games are legal and safe for consumers. My office is committed to ensuring that our gaming laws are strictly enforced and those who violate those laws are held accountable.”
VGW appears to be reading the writing on the wall with its exit from Michigan though the company’s official statement on the matter said only, “VGW continually evaluates their business operations in the interests of all their stakeholders and after careful consideration they have decided to take this course of action.”
VGW also recently pulled its products from the Washington and Idaho markets under similar circumstances.