AGA representative criticizes sweepstakes, questions their legality

The New Normal webinar has gathered together some of the most prominent trade group representatives in the United States during a recent session, with Senior Vice President of Government Relations for the American Gaming Association, Chris Cylke, conference chairman of the Indian Gaming Association Victor Rocha, and executive director of the Indian Gaming Association all attending Jason Giles.

Sweepstakes do not have "skin in the game"

The discussion pivoted towards the sweepstakes model and whether it was fully aligned with the regulated gambling market in the United States. The American Gaming Association has recently started calling out sweepstakes as a form of unregulated gambling that has been doing business at the expense of regulated operators, the trade group insists.

This criticism has prompted the formation of a counter-industry body aimed at protecting the interests of sweepstakes and social casino operators, and which has insisted on the historic precedent and legality of the sector. During a recent briefing hosted by the Social andPromotional Gaming Association, the SPGA sought to explain what sweepstakes weren’t, and more importantly – what they were.

However, Cylke is not convinced, as he said on The New Normal that the operators in the sweepstakes sector were indeed making real money.

"They hadn’t been on our radar until that point, but we started to dig in on how they operate. We found they’re making real money off of this and started to get more dribs and drabs from our members that this is something we need to look at," Cylke articulated.

Although he acknowledged that sweepstakes are regulated under the Federal Trade Commission’s existing laws, he argued that the regulator most likely does not know what the current status quo of sweepstakes casinos and social casinos is.

Cylke blasted the sector, arguing that it has presented itself as an "innovator" and has used its novelty to expand rapidly, but then again – it offers customers a product that feels like gambling but falls short of meeting the same regulatory standards.

AGA wants states to evaluate the sweepstakes model

The American Gaming Association has not been on the sweepstakes trail for a long time. The trade group mostly got interested in the sector following a cease-and-desist letter issued to VGW Luckyland in Michigan, which prompted the trade group to examine the matter further.

Cylke has further criticized the model as "not having any skin in the game," meaning that the social and sweepstakes casino operators have little to lose if things turn sour.

Although the legality of sweepstakes and social casinos is a new matter on the gambling radar, the largest gambling trade group in the country has picked a side – and it is not that of social and sweepstake casino operators. The SPGA has been, in the meantime, mounting a defense.

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