Sweepstakes and social casinos have grown in popularity with Americans spending $40 billion on the gaming platforms over the last decade, according to gaming firm Eilers & Krejcik Gaming. A New Jersey legislator is now seeking to regulate the industry in the state.
Assemblyman Clinton Calabrese (D) has proposed one of the first attempts to regulate the gaming sites. Bill A5196 would classify the sites more as traditional online gaming in the Garden State. The industry would be regulated in the same way more traditional online gambling platforms are policed in the state.
“Sweepstakes casinos have operated in a regulatory gray area, which has led to significant challenges, including consumer protection concerns, underage gambling, and economic losses for the state,” he told Gaming Today. “Recognizing these issues, I have introduced this legislation to address the lack of oversight for these platforms.
Treating Industry Like Other Online Operators
Sweepstakes casinos allow users to play various casino-style games for free while also allowing players to buy more virtual coins or tokens to keep playing. Some sites allow players to win cash and other prizes and critics argue that the platforms skirt gaming laws and that there is little regulation of the industry.
“This bill aims to establish clear regulatory requirements and create a level playing field for all operators, ensuring that sweepstakes casinos meet the same standards as other forms of internet gaming in New Jersey.”
That would include auditing the operators and seeking a license within the state. As with other online gaming sites in the state, sweepstakes sites would also have to partner with one of the state’s casinos.
The bill comes at a time when online gambling platforms in the state are out-earning their brick-and-mortar counterparts. In October, online casino revenue topped live casino betting numbers for the first time ever.
Industry Responds
The gaming companies say there is no obligation to purchase additional tokens to keep playing on the sites and that players have no expectation of winning as in traditional casino gaming. They liken their sites more to traditional mobile gaming than casino wagering.
Possibly in response to the increased scrutiny, the Social and Promotional Gaming Association (SPGA) announced a new code of conduct for operators in December. The program outlined four pillars for the industry including: age verification to limit purchases to users 18 and older; proper identity verification; location verification of customers’ and anti-money laundering policies to ensure proper transaction monitoring.
“The pillars of the SPGA Code of Conduct highlight the technology and processes already in place at most social sweeps operators to ensure that the millions of adults who enjoy these games do so in a safe and reliable environment,” SPGA spokesperson Camilla Wright said. “The standards of the code of conduct go above and beyond the accepted best practices for traditional social casinos.”