SPGA vs AGA: The US sweepstakes debate
Despite being discussed to near-exhaustion over the past 12 months within gaming, the sweepstakes industry retains a youthful exuberance for contention. As time goes on – the potential of the sector feels increasingly akin to a dormant volcano that is well overdue an explosion.
Regardless of which side of the fence you fall, the potential of the sweepstakes market is one that simply cannot be ignored and – although still in its fledgling phase – the sector has continued to crash into the gaming industry all guns blazing in recent months.
Sweepstakes is, of course, polarising. Indeed, that polarisation is perhaps most clearly evidenced by the differing regulatory approaches that have been taken up across the US so far. Recent news in January that the Mississippi Senate motioned to outlaw sweepstakes as part of its SB 2510 bill was immediately followed by developments in New Jersey which indicate that the Garden State had gone the other way entirely – and could become the first regulated sweepstakes market. A few weeks later, Maryland released a bill that motioned to ban sweepstakes outright in the state.
Proponents on both sides, then, were there to witness the American Gaming Association (AGA) take a swing at the sweepstakes sector as part of its annual State of the Industry webinar in February. However, the Social Sweepstakes Gaming Alliance (SPGA) showed no fear in the face of the industry goliath and came swinging right back. Gambling Insider walks you through round by round…
ROUND 1: AGA’S ROUNDHOUSE
Indeed, February saw not only the AGA report the US’ highest-ever annual commercial gaming revenue – but also take a jab at the sweepstakes sector, raising concerns around the impact of sweepstakes casinos and stating that they undermine the regulated market by contributing to illegal gambling activity. Overall, it was estimated by the AGA that, during 2024, illegal and unregulated operators took $109bn in bets in 2024, costing the US $17.3bn in lost revenue. Following on from this, the AGA stated that some sweepstakes operators “exploit legal loopholes” to continue operations within state markets – labelling these businesses as part of the broader illegal landscape. Factually, sweepstakes is not currently regulated anywhere in the US. That being said, some states do yield stricter laws and regulations around the practice, with other states being more relaxed. Regardless, as the sweepstakes sector continues to grow, so does the grey area within which it exists. This is an issue which has been, quite rightly, pointed out by the AGA in this instance.
ROUND 2: BOB, WEAVE, SWEEP(STAKE)
In the face of an institution such as the AGA, the SPGA has shown no signs of intimidation, however, and has instead opted for the approach of going straight on the offensive. It – immediately – outright rejected the AGA’s claims and argued that social sweepstakes gaming is legally distinct from offshore gambling.
Further, the SPGA has clarified that most sweepstakes sites do, in fact, contribute some form of tax to the Government, as well as stating that “properly operated sweepstakes are legal in most states.”
Continuing, the Association stated: “SPGA members operate within well-established legal frameworks that contrast starkly with black-market offshore sportsbooks and casinos. The AGA knows that social sweepstakes sites don’t directly compete with traditional real-money online casinos, a fact supported by research from both Eilers & Krejcik Gaming and Macquarie.”
The SPGA is only a few months old but, despite being formed in December 2024, the body has clearly wasted no time in forming a strong identity and will to fight its industry’s corner. Closing out with a final blow that addressed the AGA’s assertion that sweepstakes sites operate irresponsibly, the group argues that its members use the same AML, age verification and general protection measures as AGA-regulated casinos, also pointing out that sweepstakes cannot be hindering the iGaming sector; as it has just experienced exponential growth in 2024.
A BATTLE AMONG THE WAR
It is true that there are no winners, nor losers, in this scuffle yet – simply two bodies advocating for their vision of the industry moving forward. The AGA has now clarified that it wishes to continue working with regulators to tackle unlicensed gambling, while the SPGA has again called for enhanced recognition of sweepstakes as a legitimate entity. Game on?
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