With each passing day, states across the country continue to introduce legislation aimed at restricting sweepstakes casinos. There are state-by-state legislative updates on this growing trend seemingly on a daily basis as the crackdown on the legality of these platforms continues. Florida is one of those states seeking to implement its own policies towards this through House Bill 189 (HB 189). With the legislative session recently ending for the year, the Sunshine State will have to wait until the next legislative session to put in place guidelines to prevent sweepstakes casinos from being offered to its residents. But while the state waits for that session to begin, let’s examine what it is hoping to achieve and why it hit a snag.
What Are Sweepstakes Casinos?
Sweepstakes casinos are a type of online gambling that differentiates itself from traditional regulated casinos across the United States. These casinos offer almost all the games you can play at regulated casinos across the country. These platforms offer games ranging from blackjack and peer-to-peer poker to roulette, video poker, and slot machines. However, they differ from traditional state-regulated casinos in that they use a dual-currency system and “no purchase necessary” language, which allows them to operate in a legal gray area.
The Divide Between Sweepstakes Casinos and Traditional Regulated Casinos
Regulated casinos have laws in place, such as consumer protections and age verification, as well as taxation rules and other safeguards, that are not always found in sweepstakes casinos. Operators of these online casinos are now at odds with lawmakers over how they should operate. Lawmakers have raised concerns about the legality of sweepstakes casinos, especially their potential impact on the growing problem of gambling among younger players. While regulated casinos are mandated to provide help for problem gambling issues, Sweepstakes Casinos operate under Sweepstakes Laws, which place them in a legal gray area. For these reasons, politicians in several states are pushing for outright bans or, at the very least, stricter restrictions on these platforms.
Explaining the Dual-Currency System and “No Purchase Necessary”
Sweepstakes Laws function much differently than traditional regulated casino laws across the country. Using the dual-currency system and “no purchase necessary” language has become a key sticking point for lawmakers who look to ban or restrict their operations. Sweepstakes casinos use two different sets of coins for their customers to play with. These coins can be acquired through promotional events, by claiming daily rewards, or by signing up for daily bonuses. Sweepstakes Coins are used to play for real cash and prizes, while Gold Coins are used to play for entertainment purposes only. By also using “no purchase necessary” language, sweepstakes casino operators claim they are offering legal promotional contests to their users, while several state lawmakers across the country are arguing that this is a way for these companies to offer unregulated online gambling. Because of these factors, sweepstakes casinos operate in the legal gray area of U.S. gambling laws. Using “no purchase necessary” language and the dual-currency system are what are triggering opposition from lawmakers, who now look to ban or impose regulations on these online gambling platforms.
Florida Introduces HB 189
With the objective of banning Sweepstakes Casinos, Florida introduced HB 189 in November to address the legality of unregulated online gambling. The Bill aimed not only to prohibit sweepstakes casinos from operating but also to have the state eliminate the dual-currency system. The Bill also focused on changing the state’s definition of what constitutes online gambling to include casino-style games. Additionally, the Bill also proposed expanding criminal penalties, increasing charges against illegal online gambling platforms to third-degree felonies, and giving the Florida Gaming Control Commission greater oversight of gambling operations across the state. Games of chance, such as blackjack and slot machines, were among those targeted by lawmakers in their attempt to ban sweepstakes casinos from operating. HB 189 also focused on online daily fantasy sports, in an effort to separate DFS from traditional sports betting.
Why Bill HB 189 Failed
After HB 189 passed the Commerce Committee, it advanced to a full House of Representatives vote before the year’s legislative deadline on March 13. Unfortunately for supporters of the Bill, it failed to receive a final vote before the legislative deadline, meaning lawmakers would need to reintroduce the measure in a future session. In the meantime, sweepstakes casinos will continue their operations in the state until the Bill is reintroduced and passed by the House.
Other Florida Gambling Bills
HB 189 was not the first proposed Bill in Florida looking to crack down on the online gambling industry in the state. Through Senate Bill 1580 (SB 1580), which focused on unregulated internet gaming, the state demonstrated its intent to legally challenge these gambling platforms. Though the Bill did not specifically mention sweepstakes casinos, it passed through the state’s legislative chambers. Eventually, it died because the House of Representatives made alterations that the Senate did not approve, and because the legislative session deadline had passed.
House Bill 591 (HB 591)
Another bill introduced by Florida lawmakers was HB 591, which aimed to further define online gambling under state law. In Florida, the Seminole Tribe holds exclusive rights to certain forms of online gambling under state gambling laws, and this Bill aimed to ensure that power remains with the Tribe while preserving its exclusivity rights under the state’s current gaming laws. HB 591 specifically targeted the dual-currency systems used by sweepstakes casinos, one of the main points of criticism nationwide.
Florida’s Next Steps
Florida now has to wait until its next legislative session begins before reintroducing any of its proposed gambling bills. While HB 189 remains the one focused specifically on banning sweepstakes casinos, lawmakers will have to reach an agreement on what exactly held the Bill up from being voted on before the March deadline. Other states have run into the issue that including language on online sports gambling in bills tied to sweepstakes casinos could potentially derail them, as happened when a Mississippi Sweepstakes Bill hit a standstill because lawmakers couldn’t reach an agreement on whether sports betting should be tied to the proposed legislation.
Other States Looking to Ban Sweepstakes Casinos
Several other states have also either banned or have proposed legislation to eliminate sweepstakes casinos from operating. California, Connecticut, Delaware, and Montana have already banned them fully.
In Indiana, the future of sweepstakes casinos will chang drastically on July 1 through House Bill 1052. The Indiana Senate approved an anti-sweeps Bill, which takes effect that day; however, the state added a special clause allowing these platforms to offer peer-to-peer poker, claiming it is a game of skill rather than a game of chance.
Maine has already passed a bill, Legislative Document 1164, that regulates and legalizes tribal-controlled online Casinos. Joining other states that are looking to fully ban sweepstakes casinos in the way they operate is Maine, where lawmakers moved to ban dual-currency Sweepstakes Casinos through Legislative Document 2007.
Like Maine, Maryland also introduced two bills to ban sweepstakes casinos in the state. House Bill 295 focused on banning the dual-currency system and increasing fines for violators, while House Bill 1226, “The Maryland Illegal Gambling Enforcement Act”, aimed to give the state the power to enforce its authority against sweepstakes casinos and other forms of illegal online gambling. However, the state legislative session concluded on April 13, meaning both Maryland Bills banning Sweepstakes Casinos passed the deadline and will have to be reintroduced during the next legislative session.
Louisiana is also taking a stance against sweepstakes casinos from operating. House Bill 53 aims to penalize violators by allowing them to be charged with racketeering crimes. As Louisiana proposes harsher penalties for Sweepstakes Casinos, other states may want to increase their penalties against operators, as violators under the Louisiana Racketeering Act could face fines of up to $1,000,000 and prison sentences of up to 50 years. The state also introduced House Bill 883, which seeks to add to the state’s current gambling laws that the dual-currency system should fall under its definition of illegal gambling.
And Sweepstakes Bills are set for a hearing in Minnesota. Under Senate File 4474, the state seeks to prohibit online sweepstakes games that could be classified as offering a dual-currency system and casino-style gambling.
The Future of Sweepstakes Casinos in Florida
As more states continue to examine the legality of sweepstakes casinos, Florida is among the latest to challenge the laws governing these online gambling platforms. Although HB 189 failed to advance before the legislative session ended, the effort to ban these institutions shows the growing momentum states are placing on sweepstakes casinos nationwide. Florida lawmakers are expected to revisit the issue during the next legislative session as they continue their fight against illegal gambling while also focusing on concerns regarding consumer protections, underage gambling, and unregulated online gambling. Until then, these platforms will continue operating. What is certain is that efforts to ban sweepstakes casinos, not only in Florida but across the United States, continue to grow as many states look to establish clearer online gambling regulations.
