Sweepstakes operators have recently come under increased scrutiny but have responded by forming their own trade group to advocate on their behalf.
Advocacy Group
The formation of the Social and Promotional Gaming Association (SPGA) was recently announced and it will be the industry mouthpiece and advocacy group for sweepstakes operators that have drawn the ire of the American Gaming Association, the industry lobbying group for major land-based casinos and online gaming companies.
According to its press release it bills itself as “an organization dedicated to providing stakeholder education and advocating for the responsible operation of social and promotional games, sometimes referred to as social sweepstakes games.”
“The formation of the SPGA is a critical step toward establishing a clear and cohesive voice for the social sweepstakes industry,” said Seth Schorr, CEO at FSG Digital Inc. “By creating this association, we are committed to helping regulators and policymakers understand how our industry’s products work and how they comply with the appropriate state and federal laws.”
The SPGA consists of the following 11 members including 10 Ten Gaming, Blazesoft, Fliff, FSG Digital, Gold Coin Group, High 5 Entertainment, KHK Games, Kickr Games, Octacom, Rolling Riches, and Woopla Gaming.
The SPGA website asserts that its members have “established the legality of their games and platform through a thorough legal and regulatory analysis that ensures they are compliant with federal and state laws, differentiates their offerings from gambling, and provides assurance to business partners.”
According to its website, a webinar launch on October 1st will articulate in more detail the goals of the new industry trade group.
AGA Demands Increased Scrutiny
The American Gaming Association has been banging the drum for increased regulatory action against sweepstakes that often blur the lines between online sweepstakes activities and the realm in which online sportsbooks and iGaming sites operate.
The AGA released a memo titled, “Regulatory Vigilance Critical to Ensure ‘Sweepstakes’ Don’t Threaten Consumers and Undermine Gaming Regulation”, which opines that “sweepstakes-based” models are used to “potentially skirt gaming laws and regulations.”
“The lack of regulatory oversight presents many risks for consumers as well as the integrity and economic benefits of the legal gaming market through investment and tax contributions,” the memo reads. “These sweepstakes-based operators have weak (if any) responsible gaming protocols and few, if any, self-exclusion processes.”
It should be noted that several jurisdictions like Michigan have clamped down on sweepstakes companies. Regulators in Michigan sent cease-and-desist letters to PredictionStrike, Stake.us, and VGW which proved to be effective in shutting down those operations in the Wolverine State.
Earlier this year, MGCB Executive Director Henry Williams said in a press release, “Gambling regulations are in place for a reason, and illegal gambling operations are not welcome in Michigan. We do not want businesses who skirt the law having access to Michigan citizens and leaving them vulnerable because they are playing on unregulated sites that leave them with no recourse, and that siphon funds away from communities because they are not paying taxes like a regulated, legal gambling establishment would.”
