A member of the American Gaming Association said promoting responsible gaming is the No. 1 issue for the U.S. trade group, but a member battling unregulated gambling is right there, too.
Chris Cylke, senior vice president of government relations at the AGA, and his organization have joined the Indian Gaming Association in their fight against sweepstakes gaming and social sportsbooks.
“I do think this is a really critical issue for the gaming industry,” Cylke said during Wednesday’s IGA webinar. “How these issues play out over the next couple of years I think will have a fundamental impact on what this industry looks like decades from now. It’s critically important that we get this right.”
Cracking down
The AGA sent out a memo to U.S. state regulators and legislators in August, asking them to crack down on potentially unlawful sweepstakes gaming in their jurisdictions. The AGA and IGA argue that these free-to-play games, which can turn into virtual currency, mimic regulated online casinos and sportsbooks.
The anti-sweepstakes groups say the sweepstakes businesses skirt state regulations and laws, don’t pay taxes, and aren’t held to the same responsible gaming protocols as regulated operators.
“The biggest goal here is clarity,” Cylke said. “Even if the determination is that these (sweepstakes games) are on the up and up, at least that will give folks in California, the tribes, or commercial operators, it will let you know where you stand and make an informed decision on whether you want to get involved in this space. Whether you want to go and change the law to make it clear that this is all a ruse. It will give you options.”
Big market expansion & murky waters
Along with the Sports Betting Alliance, the AGA and IGA stand together in support of bringing these sweepstakes companies into the regulated market. Tribal nations hold a gaming compact in California, and they have fought to make sure all forms of gambling go through them.
IGA and AGA representatives say the sweepstakes companies have made enough money operating in the gray that they can now afford lawyers and lobbyists to argue their legitimacy as businesses.
Cylke said he’s talked with gaming operators in the AGA that said if “sweepstakes gaming was as clear cut as it’s been laid out by those involved in it, we would probably be in that vertical.” Cylke added that instead of playing a game of Whac-A-Mole with 50 U.S. states, he wants to see the federal government potentially do more to clean up the messiness, but sweepstakes gaming is not a major priority for politicians.
“Is it going to take a huge scandal and then all of a sudden the feds get involved? That’s not what we want,” IGA Executive Director Jason Giles said. “I think politics is definitely involved.”
He says the Federal Trade Commission, which has regulatory power over sweepstakes games, doesn’t have “any clue what’s going on” with the legality issues.
“We certainly need to keep the heat on at the federal level in terms of getting a better policy when it comes to some of these illegal gambling entities or unregulated gambling entities and also making it a priority for them to prosecute,” Cylke said.
Potential progress
The states and tribes have mostly controlled legalizing and regulating sports betting, iGaming, and casinos in the U.S., but the recent introduction of the SAFE Bet Act, if passed, could lead to more clarification.
While the AGA is against it, Cylke said he will continue working with tribal and commercial operators to convince state attorney generals and law enforcement of sweepstakes gaming’s murky waters. As the IGA and AGA joint panel noted on Wednesday, the U.S. election next week could present opportunities to spread their message to new faces.
“I’m not completely satisfied with where we are right now,” Cylke said. “There’s certainly progress that needs to be made, but we’re certainly getting there. It’s been encouraging to see.”
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