New Jersey resident Julian Bargo voluntarily dismissed his lawsuit, without prejudice, against Apple, Google, and four sweepstakes casino companies Friday. Bargo had filed the lawsuit back in November, after allegedly losing more than $1,000 on various sweepstakes casino apps.
Bargo alleged the apps were illegal, claiming "The Gaming Defendants are not licensed, not regulated, and as the Plaintiff and other class members have come to learn time and time again, the Gaming Defendants only pay as, when, and if they choose to do so.”
Along with the sweepstakes casinos, Bargo also sued Apple, Apple Pay, Google, and Google Pay, since they, through their app store, are “directly profiting from the Gaming Defendants' illegal interstate gambling enterprise."
Don’t, however, view this dismissal as a win for sweepstakes casino operators. Based on the amount of legal activity seeking to ban the unlicensed sites, their days may be numbered.
The prevalence of sweepstakes casinos
So-called sweepstakes casinos are online casinos operating in a legal gray area. They are generally unlicensed and unregulated websites, offering many of the same slots and casino games as legal operators. Although real money is not required to play, there are enticements throughout the playing experience urging customers to buy virtual currency with real money. In many cases, players are not aware of the inherent risks of playing on the unregulated sites.
Only a handful of states offer legal, regulated online casino gambling. Yet, sweepstakes casinos target customers throughout the U.S. A few states have explicit regulations, barring sweepstakes casino operators. But other state laws are vague enough for the sweepstakes casinos to operate under the regulatory radar.
New focus on the gray zone
In August, the American Gaming Association (AGA) called for stricter oversight of sweepstakes casinos, stating “Gaming regulators and state attorneys general should investigate companies or platforms that offer casino games or a form of sports betting under the ‘sweepstakes’ model to determine whether or not these operators are in compliance with their respective laws and regulations and take appropriate action if not.”
The National Council of Legislators from Gaming States (NCLGS) also isn’t a fan of sweepstakes operators. In November, NCLGS published its draft “Model Internet Gaming Act,” including a chapter entitled “Sweepstakes Games Prohibited.”
Several states are, in fact, cracking down on unlicensed gambling operators, including social gaming sites. For instance, Michigan successfully eradicated the sweepstakes operators One Country and Virtual Gaming Worlds.
Meanwhile, other states are beefing up their laws to explicitly ban sweepstakes gambling sites. The Connecticut General Law Committee filed a bill (No. 1235) last month that would ban sweepstakes featuring "real or simulated online casino gaming or sports wagering."
A bill to ban sweepstakes operators passed Mississippi’s Senate last month and passed the House of Representatives with amendments this month. The bill has been returned to the Mississippi Senate for concurrence. Additionally, Nevada legislators introduced a bill to increase the penalties for providing illegal online gambling, which would including sweepstake casino operators.
