Future of Sweepstake Casinos in the Regulatory Spotlight

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00:00Sweepstakes, I mean, this is another hot topic this season, is discussing whether or not they are going to survive in the casinos.

00:07There's a social gaming leadership alliance that has emerged, I'm guessing, to try and keep them around.

00:13Sam, you tell us more.

00:15Yes, certainly.

00:16We've seen these new organizations pop up.

00:19Sort of a similar topic we were just talking about.

00:21Not quite offshore sports betting, not quite prediction markets, but another form of quasi-regulated gaming

00:28that doesn't want to be regulated as gaming.

00:30It's the sweepstakes-style casino and sports betting games that have emerged in pretty much all 50 states.

00:37So they're offering a product that looks like sports betting, looks like online blackjack,

00:41but because they have some sort of option or way where you can play for free,

00:47they're trying to use the sweepstakes law to not technically be regulated as gaming.

00:53So states have kind of taken an issue with that and said, you know,

00:56I think it's about 12 now that have passed or at least introduced bills that would declare these games

01:01as illegal gambling, saying they're skirting the laws, using a loophole.

01:05And in the response, you've seen new organizations pop up.

01:08VGW, which is a huge brand in this space, which owns and operates a bunch of different free-to-play casino sites

01:15where you also can pay money.

01:17That's how they make a majority of their money, is people paying on these games.

01:20They just started this new organization called the Social Gaming Leadership Alliance.

01:25They're saying to ensure that stakeholders understand the growing industry, including free-to-play casino-themed games

01:32and leverage the promotions properly.

01:35This comes as, you know, they have another organization out there which has kind of tried to do the same thing

01:39and has not been as successful.

01:41This time, this group will be headed by a former South Carolina congressman, Jeff Duncan.

01:46And so that's pretty notable that you're having a former lawmaker involved, at least bring some sort of legitimacy

01:51to this growing effort.

01:52And it's a little different than offshore sports betting where they are trying to be deemed legal

01:57but deemed legal as a different industry.

02:01And we've certainly seen a lot of money thrown at this.

02:03It's one of the big exploding new sectors in, you know, the quasi-regulated sports betting market

02:08along with promotion or along with prediction markets, along with events contracts

02:12and fantasy sports we talked about all last year.

02:15So who knows, at this time next year we could be talking about a totally new type of way

02:20for sports betting to exist without technically being called sports betting.

02:24And they're certainly ramping their efforts up this legislative season

02:27while a bunch of states consider these different bills and try to ban them in their own ways.

02:31So this is a sign that this is not going to go away anytime soon.

02:34But again, it could be one of those state-by-state steps where one at a time

02:39they kind of get picked off the map.