The Social and Promotional Games Association (SPGA) has issued a statement criticising Pennsylvania’s action against sweepstakes games operators.
The SPGA said they are “concerned by Pennsylvania’s recent cease-and-desist orders against 18 sweepstakes operators. This broad regulatory action is out of step with legal precedent and industry standards.”
States against sweepstakes games
Last week, Pennsylvania regulators confirmed they had sent the orders over claims the sites were offering illegal gambling.
Idaho and Washington have successfully prohibited sweepstakes casinos. In Washington last year, a lawsuit claimed $25 million in compensation from sweepstakes games operator, High 5 Games.
Similar lawsuits were filed in California and Illinois recently. At the same time, many bills have been proposed to try and make legislation stricter. Many sweepstakes companies exited New York this month due to a crackdown.
The SPGA, however, rejects the claim that sweepstakes games are disguised forms of illegal gambling. The statement mentioned that other states have tried and failed to ban these platforms and emphasized that they are legal and safe.
“Three state legislatures have recently rejected similar proposals, reinforcing what Pennsylvania’s approach may overlook: when properly structured, promotional sweepstakes are legal, safe, and widely enjoyed by American adults.”
What will be next, candy crush?
The statement also referenced the difficulty for regulators as many seemingly harmless fun games use similar models to sweepstakes casinos.
“What games are Pennsylvania regulators going to ban next—Candy Crush? Solitaire?’ said an SPGA spokesperson. ‘Thousands of games in the App Store mix play and prizes. It’s regulatory overreach to start picking and choosing which ones they simply don’t like.’”
Most sweepstakes games operators use forms of virtual cash that players use to play casino games. This additional step means players are not gambling directly and allows players to participate even from states where online casinos are illegal.
Big business
Approximately 55 million Americans participate in sweepstakes games annually. The industry is valued at more than $2.5 billion and continues to grow.
In states with no legal online casinos, sweepstakes operators have been thriving. For example, last year, unlicensed casino operators generated $4.3 billion in New York. This prompted stricter regulations that forced many companies to exit the lucrative market this month.
In Pennsylvania, where online casinos are legal and regulated, the unlicensed operators still generated $2.2 billion in revenue. This was, however, less than the $2.8 billion generated by legal online casinos.
Legal online casinos can take a large chunk of the market away from unlicensed operators. They also contribute a lot of tax revenue. Pennsylvania generated $2.6 billion in tax revenue across the gambling industry in 2024.
Therefore, it is no wonder that the state wants to banish the unlicensed operators who do not contribute tax dollars. The SPGA, however, will continue to back the sweepstakes games platforms. And, the back and forth will continue while Americans seek the sites they can access for their gaming desires.
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