As regulatory bodies and lawmakers across the United States continue to adapt their approach to the iGaming industry, the legislative landscape around the country has been constantly shifting in recent years. Currently, the subject of sweepstakes casinos and social gaming is under particularly high levels of scrutiny in certain US states, with lawmakers in several areas proposing new legislation to heavily restrict or ban these online activities.
However, given the recent failure of a number of bills put forward in the hopes of curtailing social gaming, some lawyers and industry experts have pointed out certain significant flaws in this unilaterally restrictive approach. We’ve taken a closer look at the facts to help you consider whether the new proposed social gaming legislation is actually realistic.
What is the reasoning behind the proposals?
Sweepstakes-style gaming has begun to receive increased scrutiny from legislators in the United States, and this is particularly evident in the states that already have more restrictive iGaming laws. This is because sweepstakes casinos exist in a legal gray area – since they are not defined in the same way as more traditional online gambling formats, these popular games frequently circumvent existing gambling law, allowing them to continue to operate in most states in the country at present.
Despite this, certain US legislators believe that these games should be defined in the same way as classic gambling activities, and should therefore be subjected to the same restrictions as the more traditional formats of iGaming available today. With sweepstakes becoming increasingly popular, this has led to increased pushback from lawmakers who fundamentally oppose online gambling.
Since sweepstakes platforms operate using dual-currency systems and always offer an alternative free method of entry (AMOE), they have until now been able to set themselves apart from traditional gambling websites. Their unique legal status in the United States today is a fascinating phenomenon, as it has significant implications for the feasibility of introducing more prohibitive legislation.
Whilst some legislators wish to introduce an outright ban on this style of gaming, the sweepstakes model is also very prevalent as a marketing technique across the country, with many leading brands using free-to-enter competitions as a means of promoting their products to new customers. The ubiquitous and varied nature of competition-based gaming in the US, therefore, makes it difficult to impose restrictions, causing some people to argue that the recently proposed social gaming legislation is unrealistic and unenforceable.
Why have recent legislative efforts failed?
Recent attempts to restrict social games and sweepstakes have notably failed in three US states, with bills in Maryland, Mississippi, and Arkansas all being either formally withdrawn or not acted upon. This ongoing pattern indicates that many lawmakers are uncertain about the evidence behind the bills and are hesitant to push ahead with such a restrictive approach.
Across multiple sectors, there is growing concern about the broad-sweeping and unclear definitions present in the proposals – notably, many gaming industry leaders, including members of the Social and Promotional Gaming Association (SPGA), have spoken of the likely unintended consequences of the bills. They have stated that such a prohibitive approach would cause disruption to the regular competitions and loyalty schemes currently offered by a number of businesses, including popular consumer brands, restaurant and hotel chains, and major US airlines. With the wider US economy already facing challenges right now, it is clear that any such drastic decisions should not be made lightly.
Those working in the online games sphere have also highlighted possible long-term impacts of the proposed legislation, arguing that the financial implications of such a ban have not been given adequate attention. They note that a sweeping prohibitive approach would have a significant negative impact on the wider technology industry – including the countless software developers, leading payment platforms, and digital solutions involved – which would potentially stunt the economic growth of this thriving sector, and could threaten job security for the millions of Americans working in tech today.
In order to build a more productive and nuanced conversation between sweepstakes operators and US lawmakers, the SPGA has since called for increased consultation with industry stakeholders before any further regulatory changes are enacted.
With the iGaming industry growing at an astonishing rate, sweepstakes-style online games remain accessible in the majority of the country today – meaning a more permissive future for this popular activity could possibly be on the horizon. Casual gaming is enormously prevalent across multiple demographics in the US today, and for those looking to find the best options, Casino.org rank sweepstakes daily bonuses on a regular basis, helping users in the US to keep up with this highly competitive market.
The success of newly opened regulated iGaming markets in states like Michigan and New Jersey has definitely caught the attention of many American lawmakers, meaning that a legal, regulated landscape for traditional online gambling platforms could soon be visible throughout other parts of the country. This could potentially lead to positive changes for the social gaming industry, as a more permissive atmosphere for iGaming as a whole would enable sweepstakes casinos to flourish without the threat of new restrictions.
Ultimately, as various states struggle to enact effective bans on sweepstakes-style games, it is becoming clear that a more nuanced approach to the subject might be required across the US today. Many have argued that increased regulation of this gaming format would be a more productive approach, as it would allow legislators to manage the operations of these platforms more closely, whilst also making allowances for the significant use of social gaming in modern business marketing strategies.
The popularity of social gaming certainly shows no sign of slowing down, and lawmakers are being forced to grapple with the immense consumer demand on display amongst their constituents. Evidently, the recent examples of proposed social gaming legislation are not wholly realistic, as they have not accounted for the wider economic implications of such an outright ban on the activity. Whatever happens next, the next few years will certainly be fascinating for social gaming legislation in the United States.
