Keystone State regulators took action recently against sweepstakes casinos.
The Pennsylvania Gaming Control Board (PGCB) said during the House’s Gaming Oversight Committee hearing on Monday that it sent 18 cease-and-desist letters to companies offering online gaming to state residents without a license.
Key Takeaways
- The Pennsylvania Gaming Control Board told the House Gaming Oversight Committee that sweepstakes casinos are “illegal online gambling.”
- Weeding out unlicensed sweepstakes companies is like a game of “whack-a-mole.”
- The regulatory body called for legislative change to the state’s Gambling Act that will ban all sweepstakes operators.
“Sweepstakes casinos, despite their misleading presentation, are, in our assessment, illegal online gambling,” PGCB chief enforcement counsel Cyrus Pitre said to the committee.
Regulators added that all 18, some offshore and some in-state, complied with the order to stop doing business in Pennsylvania. However, the agency told the legislators that it lacks the authority to pursue legal action and is having a hard time stopping sweepstakes from growing.
“The shear volume of these sites creates a whack-a-mole scenario,” Pitre said. "For every site we manage to shut down, dozens of others emerge or become operational each day."
Calling for changes
The state legally operates PA online casino and Pennsylvania sports betting. It joins other U.S. states that have gone after sweepstakes operators in recent months. Social gaming allows users to play for free with operator-provided coins, but more can be purchased, and then winnings from online slots and table games, and even sports bets, can be exchanged for cash and prizes.
Pennsylvania is one of seven U.S. states with regulated iGaming. PGCB Chief Counsel Steve Cook said regulators want to continue to force out illegal operators that are “not obligated to be tested for fairness to the patron, nor are the sites obligated to provide responsible gaming services, age verification, or other consumer protections.”
Cook also told the committee that those operators are able to circumvent Keystone State laws, but legislative changes to the Gambling Act’s definitions would ban sweepstakes gaming and keep the PGCB from having to weed out the unlicensed operators.
“Unfortunately, in the area of interactive gaming, we are significantly hamstrung by the specific language of our enabling statute,” Cook said. “Specifically, Chapter 13B of the Gaming Act includes sections that appear to ban online gaming by unlicensed operators. These prohibitions ultimately come into conflict, however, with the definitions found in the Act.”
Help is on the way
Lawmaker and chairman of the Gaming Oversight Committee Russ Diamond was receptive to making the necessary changes needed to outlaw sweepstakes gaming, along with some careful considerations.
“We have to do it in a way that not just takes care of what’s going on today, but we have to try and anticipate what’s going to go on in a year, or two years, or five years, or 10 years,” Diamond said.
“That’s very difficult for us to do because it’s hard to imagine what people are going to come up with.”
