Two years after taking action against it, Delaware's Division of Gaming Enforcement (DGE) has issued a reminder that VGW Luckyland, Inc., a subsidiary of Australia-based VGW Holdings, is not welcome in the state. The move followed an investigation that revealed VGW had offered unlicensed online gambling operations despite previously having received a cease-and-desist order.
VGW announced Friday that it voluntarily withdrew its services from Delaware earlier this month despite disagreeing with the DGE.
Key Takeaways
- Delaware becomes the sixth state to halt VGW operations
- The DGE previously issued a cease-and-desist to VGW in 2023, but the operator continued offering its services to Delaware players
- The cease-and-desist comes on the heels of increased scrutiny regarding sweepstakes casinos in the U.S.
VGW Luckyland offers a platform where users can purchase virtual coins and play casino-style games to win real cash prizes. Although VGW describes its offerings as promotional sweepstakes, the DGE determined that the site's structure amounted to real-money gaming.
Unlike regular online casinos in the First State, the DGE has placed VGW's operations in violation of several state laws, such as the Delaware Constitution, the Delaware Gaming Competitiveness Act of 2012, and the Delaware Penal Code, according to the gaming regulator.
The DGE stated in its updated announcement about the action that any type of real-money gambling that occurs in the state will need to be licensed and stringently regulated. It reiterated its cease-and-desist order sent to VGW two years ago, adding that state residents can no longer use the platform.
In Delaware, the activity is regulated by official licensure and compliance with regulations to ensure consumer protection and legality. DGE stated that illegal sites like VGW Luckyland expose users to extreme threats such as identity theft, illegal financial transactions, and lack of consumer protection.
The Delaware State Lottery, which collaborated with the DGE on the investigation, seconded the concerns about unregulated internet gaming.
'Deeply Disappointed'
In a response shared with Covers on Friday, VGW says the company attempted to engage with the DGE to better understand its concerns and has been rebuffed.
"VGW stands by its online, casino-themed, free-to-play social games and sweepstakes promotions and continues to believe they comply with Delaware law, as well as the laws of all other jurisdictions in which those games continue to be offered," reads the statement.
"VGW is deeply disappointed at the statement issued and disagrees with its assertions."
Unlicensed iGaming platforms lack accountability
Another concern voiced by the DGE was the potential for consumer confusion triggered by the branding and marketing strategies of black-market providers. The agency feels that some platforms adopt the names, logos, and web designs of authorized Delaware casinos and copy them, making it difficult for consumers to distinguish between legal and illegitimate services.
This latest announcement is a follow-up action against VGW; in February 2023, the DGE sent a cease-and-desist letter to the company. Nevertheless, the investigation found that VGW continued to provide its services without taking corrective action, leading to the new update.
VGW has also been subject to regulatory scrutiny in several other U.S. states. The Michigan Gaming Control Board sent a cease-and-desist order to the company and other sweepstakes-based operators as part of a broader effort to impose regulation over online gambling.
Connecticut authorities also pushed VGW to exit the state in October of last year following a similar investigation. Subsequently, VGW has closed operations in at least six states: Connecticut, Michigan, Idaho, Montana, Nevada, and Washington.
VGW Holdings is now subject to increasing regulatory scrutiny throughout the United States, with additional investigations impending as more states investigate the legal standing of sweepstakes-based gaming models.
