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Industry advocates are taking aim at California’s attempt to block social casinos from operating in the state, saying that the regulation attempts are too broad and would have unforeseen effects.
What players in California and elsewhere would lose if a ban were approved is increased competition among iGaming operators – which leads to better environments for players – access to the latest games, and perhaps would alter the way that an offer from any business is viewed.
There is a growing concern among state legislators that sweepstakes casinos have flourished in a somewhat unregulated space, but there’s no documented proof that players at sweepstakes casinos are being taken advantage of any more than those at a better-known casino.
“We operate with strong responsible play standards, including age verification, spending limits, identity checks, and self-exclusion tools,” said David Jumper, Chief Marketing Officer of ARB Interactive, which is a software developer that lists Modo Casino and Publishers Clearing House as its products, in a release attacking California’s efforts to ban sweepstakes casinos.
“Contrary to the claims made by the sponsors of this bill, this is not an unregulated industry, and it’s not operating in the shadows. This is a mainstream entertainment supported by American jobs, American infrastructure, and most importantly, American investment.”
Sweeps Casinos in the Crosshairs
Sweepstakes casinos have established a place in the iGaming world as a unique alternative to better-known retail online casinos like Caesars and BetMGM. They use a modified currency system of coins that can be exchanged for gift cards or real cash after a trial period. Then players can use those coins to play table games and slots as they would in any standard casino.
Since sweepstakes casinos exist in what’s sometimes called a ‘gray’ area with multiple types of currency, they’ve come under fire, with New Jersey, Connecticut, and now California seeking to block them from players within state borders.
California bill AB831 would ban sweepstakes operators from the state and is now heading to the Appropriations Committee for deliberation.
What Would Be Lost if Banned
Sweepstakes casinos provide players options for how to spend their money in the online gambling space. The more options, the better it is for the player. There is more than one fast-food hamburger place in California. If everyone just had to eat McDonald’s all the time, that would prevent innovation and, over time, reduce the quality of service.
Social casinos took the established iGaming casino model and added a few more bells and whistles. They added leaderboards and spent more resources in the social media space than older sites to attract different players. Younger players want to be able to see their name on the leaderboard and post their winnings on a social media platform.
Players also lose out if sweepstakes casinos are blocked, by being limited in the number of games they can play.
And honestly, some players are intimidated by standard casino sites and prefer the look and feel of a social casino. That’s their right. Not everyone likes McDonald’s.
Potential Unintended Consequences
One aspect of the bill in California pointed out by advocacy groups like the Social Gaming Leadership Alliance (SGLA) and the Social and Promotional Games Association (SPGA) is that the language is too broad and that it never clarifies what a dual currency system is. This clouds the way it could be applied in other industries.
It’s common business practice for businesses to offer enticements to customers for signing up: Get $25 off your first order from a home food delivery service, become an AARP member and get a free gift, sign up with a website and get enhanced access.
Taken broadly, all those offers are a separate type of currency, whether it’s as a rebate or in goods and services. The bill in California could open a Pandora’s Box on what constitutes a legal enticement to register. Sweepstakes casinos may exist in the gray, but they’re good for the consumer.
