Illinois Goes After Sweepstakes, 65 Cease-and-Desist Letters Issued

The Illinois Gaming Control Board and the Illinois Attorney General’s Office are serious about cracking down on social sweepstakes casinos. 

Long criticized over what regulators have called skirting of gambling and consumer protection laws, 65 companies have been targeted by the latest enforcement action, which has sent a clear message to the sweepstakes sector: up and leave.

Illinois Ups Its Game Against the Sweepstakes Segment

The joint action signals commitment on behalf of regulators in the state that social sweepstakes are no longer welcome, and they will be treated as illegal gambling instead. This much is clear from the statements released by the two respective bodies, with IGB administrator Marcus D. Fruchter adding:

“Illegal online gambling operations threaten consumer protections, undermine responsible gaming safeguards, and are antithetical to the public’s interest in regulated gaming.”

AG Kwame Raoul agreed and issued a similar criticism of the websites involved, and the business model exploited in general:

“The law is clear: Gambling in Illinois must be properly licensed and regulated. Unlicensed gaming operators put Illinois consumers at risk and undermine the integrity of our regulated gaming market. We will continue to work with the Illinois Gaming Board to protect our residents and hold illegal operators accountable.”

All companies must now either shutter their operations locally or ensure that they do not offer any cash, gift cards, or other ways of redeeming real-world prizes.

Illinois is not the only state to have launched similar action against the sector, with multiple other jurisdictions taking a dim view of the segment and finally pronouncing it illegal, based on the established gambling laws. 

States that have moved against sweepstakes by similarly issuing cease-and-desist letters, or outlawing the activity entirely, include Utah, Virginia, Iowa, Tennessee, Maryland, Florida, Maine, Indiana, Mississippi, and others. 

The argument is similar across all of these states – that while there is no need to invest money yourself, the casino makes it possible for people to redeem prizes that exchange into real-world money.

In other words, critics argue, sweepstakes online casinos serve as a roundabout way to operate online casinos despite no official legislation to do so being in place. 

In for the Money, Claims AGA Survey

Furthermore, the American Gaming Association published a survey showing that the majority of people played sweepstakes casinos with the explicit goal of winning real money. 

While some operators have acquiesced to remove their dual currency use, i.e., the redeemable-for-cash-prize-currencies, most companies have opted to shutter when faced with the dilemma. 

State-level and AG-backed legal action is not the only issue that sweepstakes operators have faced of late. A lawsuit filed by plaintiff Brenda Krivatch has alleged that a popular sweepstakes casino operator. Stake.us, is operating as an “illegal gambling” platform. 

Krivatch has filed her lawsuit on behalf of Ohio residents and argues that residents have paid money to the website and subsequently lost.