Louisiana Online Sweepstakes Gaming Ban Bill Advances
The Louisiana State Senate approved a broad ban on sweepstakes-style gambling businesses this week. Senate Bill (SB 181), passed by a 39-0 vote, imposes some of the toughest penalties in the country against those who are found operating or advertising such gambling sites. The bill, if enacted, goes into effect this August.
SB 181 not only penalizes the owners of these sweepstakes casinos but also authorizes sweeping enforcement against affiliates, technology providers, marketers, and even investors who participate in or enable sweepstakes gambling in the Louisiana sports betting market. For offenders under the proposed bill, $100,000 fines per infraction and five-year prison sentences are possible.
Louisiana's legislative action is just one part of a wider trend in multiple states over the past few months. Both Connecticut sports betting and New York sports betting have also been pushing similar legislation, with the unanimous support of each state's respective committees. Connecticut SB 1235 was filed in February and passed its first committee in March with unanimous bipartisan support.
The state Senate Judiciary Committee then followed with a 37-0 vote in support of the bill last week. It has now proceeded to the Office of Fiscal Analysis and Office of Legislative Research for further consideration in a review scheduled for May 5.
New York has been on a two-prong approach in its regulation. The New York Assembly Racing and Wagering Committee recently approved Bill A06745, which bans online sweepstakes games.
This move follows Senate Bill 5935 was enacted in March under unanimous approval by the Senate Racing, Gaming, and Wagering Commission.
Gaming Operators Fight for Survival
Despite the increasing legislative steam, the sweepstakes gaming industry is pushing back. The Social and Promotional Games Association (SPGA) has condemned the deluge of anti-sweepstakes bills. The organization recently condemned Mississippi lawmakers for their own sweepstakes bill.
It argues that such legislation could have unintended consequences, such as criminalizing legitimate promotion techniques commonly used in other industries. The organization notes sweepstakes mechanics are being commonly used for marketing by everyone from fast food companies to software makers and warns that airlines' and hotels' frequent flyer and rewards systems might get caught in the legislative dragnet.
But political consensus appears solid. State legislators are couching such legislation as necessary to guard against proliferation of off-the-books sweepstakes gaming sites that could jeopardize consumers, particularly by sidestepping state gaming regulation and taxing mechanisms.
Language in the Louisiana bill suggests an aim not only to shut down the operators but to abolish the system that finances the sweepstakes format of gaming.
While lobby groups like the SPGA still complain, national momentum indicates that their influence may be declining. With Mississippi an exception—where competing bills to ban sweepstakes gaming and permit internet sports gambling both died in committee—most states that are debating such measures are proceeding with little opposition.
Besides the four states above, Florida sports betting, Maryland sports betting, Montana, and New Jersey sports betting have also had bans under consideration.
