AGA Blasts Sweepstakes Businesses in New Industry Memo

The American Gaming Association (AGA), a trade group that has ratcheted up the talk against illegal gambling in the United States and has gone after the likes of Bovada and BetOnline, has now issued a new memo in which it lambasts the sweepstakes sector and questions its legitimacy.

Sweepstakes Businesses Come Under Increased Scrutiny

The “Regulatory Vigilance Critical to Ensure ‘Sweepstakes’ Don’t Threaten Consumers and Undermine Gaming Regulation” argues that sweepstakes companies are potentially exploiting a model that only just falls short of classifying as gambling, and therefore avoids onerous regulatory frameworks, but in essence, resembles traditional online gambling a fair deal.

AGA openly suggests that the sweepstakes businesses are using this model to secure a favorable operational advantage while failing to provide the necessary consumer protection standards and depriving states where they operate from tax dollars.

The sweepstakes model has been seriously debated by companies such as Catena Media, which operates in the traditional gambling sector but has made strong overtures in the sweepstakes model. An already embattled Catena may now find another of its lucrative verticals come under attack in the United States after the company previously complained of Google algorithms.

However, AGA’s objection to the sweepstakes model does not specifically target a company but argues that the model itself ought to be re-examined. The trade group calls on state regulators to take a closer look at platforms that offer casino games, sports betting, or poker using what they describe as sweepstakes models and check if this is indeed the case.

Virtual Gaming Worlds (VGW), a popular sweepstakes company, was only just asked to leave Delaware, and the company previously had to withdraw from the market in Michigan together with Stake.us and PredictionStrike as the Michigan Gaming Control Board took a dim view of the sweeps model and sided with regular gambling companies. VGW also came under attack as part of a class-action lawsuit filed by a person in Georgia.

Closing the Gaps Between Gambling and Sweepstakes

More importantly, however, AGA wants to usher in a new age of regulation where the sweepstakes model is questioned on its merits. The trade group has criticized what it has seen as an overall weakness in the responsible gambling model provided by these companies and added that consumers run significant risks, including endangering their economic freedoms.

Speaking of the economy, the sweepstakes businesses are not contributing enough in real terms, either, and there is overall a lack of sufficient oversight, the memo continues. The trade group is similarly displeased with the overall standards of testing products that resemble gambling but are not, in its view, sufficiently tested.

“There is no independent product testing to ensure basic fairness to players, and although many claim players must be 18+, age verification procedures, if they exist are often questionable. The opaque nature of these operations also presents a prime opportunity for illegal activity and enriching bad actors,” the memo concluded.