Sweepstakes casinos are a controversial subject in the US. Many regulators across the country believe they offer unlicensed gambling veiled as free-to-play casino games. Customers can upgrade their play by buying coins, at which point it is hard to discern the activity from normal gambling.
Regulators have toyed with the idea of banning sweepstakes, but Montana is now the first state to take the action. Greg Gianforte, Montana Governor, has signed off on a bill to prohibit the gambling platforms.
outlaws any platform that allows users to utilize virtual cash or digital coins
Senate Bill 555, introduced in late March, bans dual-currency gambling, which outlaws any platform that allows users to utilize virtual cash or digital coins. The legislation took just under two months to travel from the Business, Labor, and Economic Committee, through the House, Senate, and to the Governor’s desk.
Any sweepstake found to be operating in Montana will face a fine reaching up to $50,000. Perpetrators could even be imprisoned for up to ten years.
As can be expected, the sweepstake operators are not happy with the outcome. A spokesperson for the Social and Promotional Games Association, a lobby group for sweepstakes, said it “strongly condemns” the bill’s enactment. The group says SB 555 ignores “the clear legal and operational distinctions” between sweepstakes and real-money online casinos.
The group also noted that the law makes no mention of sweepstakes outright, and highlighted that many companies in other sectors use similar models in promotions, such as McDonald’s. The fast food giant offers McDonald’s Monopoly, through which it gives customers the chance to win prizes in a similar way to sweepstakes.
