Sweepstakes and Social Casinos Form Trade Group
A group of Sweepstakes and Social Casinos have formed the Social and Promotional Gaming Association in a bid to go legit and stave off increasing scrutiny from gambling regulators.
Sweepstakes and social casinos aren’t held to the same standards as online casinos, but you can still win real money at a number of them with Sweepstakes Coins. Critics claim that these are online casinos without any of the regulation or requirements to provide fair and trustworthy games.
The Sweepstakes model means that the casinos have to follow basic consumer protection laws, but if they do that they are free to operate in most US states. Many operators block access to Idaho, Michigan, Montana and Washington, which have specific legislation that makes life difficult.
The American Gaming Association recently released a public memo attacking the Sweepstakes model, which it says is being abused to create online casinos without the paperwork.
“Where state laws and regulations are not clear, legislatures should consider enacting legislation to prevent unlicensed operators from exploiting loopholes in sweepstakes regulations to offer online real money gambling,” the memo read.
Now these 10 companies have announced the formation of the Social and Promotional Gaming Association.
The initial goal of the SPGA is to ‘highlight the well-established legality and legitimacy of social sweepstakes games, providing regulators, policy makers and consumers with a comprehensive understanding of these offerings.’
You can see this as the industry trying to self-regulate and stay within the laws, or you can see it as them circling the wagons and getting ready for a PR war at the very least. It’s a blow, then, that VGW has not signed up. The company behind Chumba Casino, Luckyland and Global Poker could have been a welcome force, but the SPGA will press on without them.
“The formation of the SPGA is a critical step toward establishing a clear and cohesive voice for the social sweepstakes industry,” said Seth Schorr, CEO at FSG Digital Inc. “By creating this association, we are committed to helping regulators and policymakers understand how our industry’s products work and how they comply with the appropriate state and federal laws.”
Social casinos running the Sweepstakes model really do sidestep a lot of legislation specifically designed to keep casinos in check and the regulators are starting to look at this growth sector of the industry. This proactive approach by the 10 companies is the first step towards clear guidelines that could secure the long-term future of social casinos and Sweepstakes models.
There will be concessions, with some games requiring a casino licence and the social casinos will undoubtedly have to beef up its KYC procedures. But if that means an industry subset that lives in a deep grey area could get the official green light, then that may be worth it.
Lingering suspicions that the whole sector of the industry could be banned at any time has undoubtedly held back investors and players. So a solid set of rules that keeps the regulators happy would be a solid step forward.
