The Maryland Lottery and Gaming Control Agency (MLGCA) has issued a cease and desist letter to Virtual Gaming Worlds (VGW), operator of Chumba Casino, LuckyLand Slots, and Global Poker.
The letter, dated 12th March, accuses the Australia-based sweepstakes operator of “offering and conducting online gaming activities in Maryland without legal authority to do so.”
It goes on to require a response confirming whether VGW is still offering such services by March 27th. It then demands that if VGW is still offering games in the state, it should include detailed descriptions of the games, along with “legal analysis or opinion interpreting Maryland law” which allows them to do so.
VGW Is Frequently Targeted
As the original innovator of the sweepstakes format and the longest player in the industry, VGW usually bears the brunt of negative attention from regulators. It does indeed currently offer sweepstakes casino and poker gaming in the Free State, alongside many other competitor sweeps operators.
The recent letter signed by MLGCA Managing Director Michael Eaton states that the “only online gaming permitted in Maryland is mobile/online sports wagering and online fantasy competitions.” It goes on to say that licenses are required for both formats and that the agency has no record of VGW holding a license for either.
Sweepstakes platforms tend to argue that their offerings are legal under sweepstakes laws defined at the state level. These laws usually state that a sweepstakes game is classified as a game of chance with real money prizes but with no purchase necessary to enter. Sweeps casinos offer a chance for entry via coins which are available for free, and this, they argue, makes them a legal alternative to traditional online gambling.
No firm precedent regarding the interpretation of this theory has yet been set in the numerous private cases against sweepstakes casinos (around 20 involve VGW). Instead, lawmakers in various states are looking to draw the line much more clearly and outlaw the vertical as soon as possible.
Two Maryland Bills Aim to Ban Sweepstakes Casinos Anyway
How VGW replies to the Maryland regulator remains to be seen.
The letter threatens that failure to respond could jeopardize any future applications for licenses or certification. However, with Maryland being one of the states setting itself up to ban sweepstakes casinos soon via SB 860, it is unlikely this threat will be of any major concern to VGW, at least in the short term. If that bill, which just passed through the Senate, becomes law, the state will likely see a mass exodus of sweepstakes operators anyway.
The companion bill, HB1140, is lagging a little behind in terms of progress through the state legislature, but a VGW representative appeared at a recent committee hearing on this bill, arguing that the sweepstakes format should be regulated rather than banned. Unfortunately for VGW, it seems that argument is falling on deaf ears in Maryland.
Author: Mike F.
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