No holds barred
Sweepstakes casinos and poker rooms are under fire in the state of Florida, as state Attorney General James Uthmeier announced this week that his office has filed lawsuits against multiple sweepstakes gambling operators. Among the defendants are Stake and VGW, which owns major brands like Global Poker, Chumba Casino, and Luckyland. Also named in the lawsuits are payment processors that work with the sites.
“These so-called ‘sweepstakes’ and ‘social casinos’ are illegal online gambling operations,” said Uthmeier in a press release. “If it looks like a casino, takes real money like a casino, and pays out like a casino, it is a casino—and it is illegal under Florida law. These companies have been preying on Floridians, including minors and seniors, with deceptive marketing, and 24/7 access, while dodging our state’s licensing, taxation, and consumer-protection requirements. They must be stopped.”
Uthmeier is going for the jugular. He wants permanent injunctions to ban the companies from operating or advertising in Florida and gambling losses returned to players, among other penalties. One would imagine the latter would be a mess to sort out.
What are customers buying?
Global Poker is one of the most popular sweepstakes online poker rooms in the U.S. It uses the standard dual-currency setup as most gaming sites in the category.
People can play poker on Global Poker for free, using a play-money currency called Gold Coins that everyone gets when they sign up. Players can also acquire Gold Coins via daily rewards, real-money purchases, and, of course, by winning at the poker tables.
But there is another currency called Sweeps Coins. These are used at separate tables and can eventually be converted into cash and prizes after meeting playthrough requirements. Sweeps Coins are also technically free, but – and this is why the Florida AG is suing – the primary way to get them is as “bonus” gift for purchasing Gold Coins.
Sweepstakes casinos and poker rooms like Global Poker contend that players are really purchasing Gold Coins, which have no real-world value, and are simply receiving Sweeps Coins as a bonus. The AG and others around the country say that this is just a way to try to skirt the law by offering real-money poker under the guise of a “bonus.” What customers are really buying, they say, are the Sweeps Coins to play real-money poker.
One of the other leaders in the sweepstakes casino space, ClubWPT Gold, recently exited the Arizona online poker market after pressure from the state. The Arizona Department of Gaming (ADG) issued a cease-and-desist letter to five operators in July, prompting ClubWPT Gold to increase its age requirement to 21. But the state did not relent and ClubWPT Gold eventually decided it was best to discontinue operations in Arizona.
