VGW – operator of Chumba Casino, LuckyLand Slots, and Global Poker – has announced it’s removing sweepstakes play (AKA promotional play) as an option for players in New York state.
It appears the ability to play with Sweeps Coins and redeem them for real money will gradually be phased out by August this year, but free play via Gold Coins will still be available to residents of the Empire State. The news was initially reported on the Sweepsy website, and it’s the same system that VGW already operates in Idaho (a state with strict anti-gambling laws).
Apparently, details have already been emailed out to NY players at Chumba, LuckyLand Slots, and Global Poker, with a phased approach designed to cause minimum stress:
- Beginning on June 2, NY players won’t have any way to get hold of new Sweeps Coins.
- Beginning on July 2, those players will lose access to promotional play with any remaining SC. Also, mail-in submissions for SC redemptions will no longer work.
- From August 1, online redemptions of SC will no longer be available.
To reiterate, free play with Gold Coins will remain in New York, and all other US states remain unaffected on VGW platforms. Perhaps some New York players will keep their accounts open in the hope that something positive could be worked out in the future.
Why VGW Is Ending Sweepstakes Play in New York
This decision from VGW comes during a year when lawmakers in various US states – including in New York – are grappling with the sweepstakes vertical and whether to ban or regulate it, with the vast majority of cases favoring the former so far.
That said, the only state so far this year to achieve passage of such a bill into law is Montana. Of course, New York is a much bigger market and more of a bellwether for national policy, so any successful ban there could influence other states.
NY Senator Joseph Addabbo – who is also Chair of the state’s Senate Racing, Gaming, and Wagering Committee – has been a vocal opponent of sweepstakes casinos as he pushes for legal iGaming in the state. Unfortunately, sweeps are not part of his vision.
Addabbo took concrete steps to further his agenda by introducing S5935 earlier this year, that would ban the format. However, that proposal and its counterpart (A6745) have made no progress in the legislature since April, and with the end of the legislative session in NY fast approaching (June 12th), it seems unlikely they’ll find success this year.
That said, other popular sweepstakes platforms have already withdrawn from NY, including RealPrize, Zula, McLuck, and Hello Millions. Australia-based VGW is not the first operator to pull the plug, but it is the biggest name to withdraw – because it’s the biggest name in sweeps.
It was Laurence Escalante, maverick founder and CEO of VGW, who innovated the sweepstakes casino format in 2012 with Chumba Casino. And while Chumba’s market share has decreased as other casinos replicated the model, it’s managed to maintain a strong presence as the sweeps originator.
A Pushback Against Sweepstakes Casinos
Legal analysts posit that this recent withdrawal news is likely in response to either the anti-sweeps bills in NY, or possibly a cease and desist from the New York State Gaming Commission or Attorney General, or maybe other factors.
The rising anti-sweeps sentiment is certainly spooking some operators. So far, proposals suggesting blanket bans in various US states have been far more numerous than suggestions of regulation. In fact, we had only one notable attempt at regulation earlier this year, when Assemblyman Clinton Calabrese in neighboring New Jersey proposed A5196. Unfortunately, it was swiftly withdrawn and replaced with a plain anti-sweeps bill.
On the sweepstakes operators side, they likely want to show a willingness to work with lawmakers and regulators, rather than face an outright ban. Escalante and his newly-formed Social Gaming Leadership Alliance trade group said as much during its recent launch:
“The SGLA’s partners are uniquely positioned to work with lawmakers, stakeholders and players to support innovation in digital games and ensure millions of Americans have the freedom to enjoy the games they love in a safe environment. I look forward to working with state and industry leadership to do just that.”
For now, there are many uncertainties, but Escalante, VGW, and the SGLA will be working hard to try and swing regulation in their favor. It’s worth remembering that DraftKings and FanDuel pulled off a similar feat in the US with sports betting after years of legal uncertainty. They did this first by exiting markets, then lobbying aggressively for regulation that ultimately legitimized their operations. VGW could be following a similar pattern, banking on the idea that temporary retreats could count in their favor in efforts for long-term viability.
Author: Jon Ridehalgh
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