If you are a sweepstakes social casino operator in Montana, things are not looking up for you. The sector has come under a lot of pressure in the United States as a whole, but Montana is leading the charge, with the state legislature agreeing that sweepstakes social casinos are just a veiled form of gambling, not least because they claim to only accept virtual coins, but most of these currencies can be then exchanged for real money in a round-about way.
Montana Poised to Snuff Out Sweepstakes Casinos
A new bill is now poised to change this and ban sweepstakes social casinos. With lawmakers determined to see this through, the matter now essentially rests with Gov. Greg Gianforte, who will have to consider the new bill and whether to sign or veto it. The new law wants to eliminate all casinos that operate with “any form of currency,” while creating room for social casinos that do not pay out prizes, which is an odd formulation that reads:
“The term includes online casinos, by whatever name known, which constitute internet gambling and therefore are prohibited. This includes but is not limited to any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency. Online casinos that do not allow the use of currency of any kind are not considered a gambling activity and therefore are permitted.”
However, whether the law passes may seem of little consequence right now, as the majority of sweepstakes social casino players are now out of state, meaning that the industry is running on fumes.
Senate Bill 555 is all but guaranteed to now become a formal law and set Montana out as the first state to have banned the sweepstakes social casino format, with the legislation taking a particular issue with the use of “sweepstake” mechanics in social casinos.
The bill does not simply seek to limit the proliferation of such casinos, but also to penalize any entity that chooses to run such business in the state.
“A person who purposely or knowingly operates any type of illegal internet gambling site within the state’s borders, including operating an online gambling site in the state through licensed or unlicensed offshore sources, is subject to felony criminal liabilities as provided under this section,” the would-be law reads.
Sweepstakes Unlikely to Disappear but Opposition Mounts
So, what’s next for the sweepstakes social casino industry? It depends. Montana may as well ban the websites, and they will comply, but a country-wide ban is harder.
There has been a lot of pushback against the sector, with sweepstakes, along with prediction markets, accused of encroaching on gambling companies’ turf without necessarily following the same strict criteria, nor being subject to the same tax regime. Sweepstakes will be facing a rocky path down the road.