A new industry organisation, the Social and Promotional Gaming Association (SPGA), has been launched to advocate for responsible operation and greater transparency in social sweepstakes games, a form of entertainment where participants can play without purchasing and potentially win prizes.
The SPGA aims to provide education to stakeholders, including policymakers and regulators, on the legal status of these games, which are increasingly popular across the US.
Social sweepstakes games offered by SPGA members allow users to participate for free with no purchase required. The SPGA’s mission is to ensure these games continue to be legally operated while promoting safe gaming practices.
The association will reportedly focus on informing consumers and officials about how these games fit within existing legal frameworks, and ensuring operators maintain high standards of compliance and consumer protection.
As part of its efforts, the SPGA has created committees to address two critical areas:
1. Player safeguards: This committee will reportedly work on providing educational resources to players, enhancing complaint resolution mechanisms and ensuring fair treatment. The SPGA will also oversee the implementation of technologies like Know Your Customer (KYC) protocols, age verification, geolocation and spending controls to protect consumers.
2. Regulatory compliance: This committee is responsible for working with regulators to ensure the continued legality of social sweepstakes games. It will focus on educating policymakers about the compliant operational models in place, including identity verification, fraud prevention and giving players control over their experience.
Seth Schorr, FSG Digital CEO, stated: "By creating this association, we are committed to helping regulators and policymakers understand how our industry’s products work and how they comply with the appropriate state and federal laws."
Camilla Wright, an SPGA spokesperson, added: "Our goal is to provide forums for sharing knowledge and best practice mutual support and to create an environment that puts consumers first."
The SPGA’s first public event will be a webinar on 1 October 2024, where industry experts will discuss the future of social and promotional gaming, including emerging trends and the regulatory landscape.
What are Sweepstakes and how big is the industry?
Back in Gambling Insider's first Sports Betting Focus magazine this year, sweepstakes games operate under a model that is legally distinct from traditional gambling, as they do not require purchases to participate.
Players can engage in games for free and win prizes, a model that has led to significant growth in the US market, particularly during the pandemic.
The social sweepstakes industry generated an estimated $3.1bn in 2022 and new entrants continue to emerge, driving further expansion.
Potential response to American Gaming Association (AGA) Memo
The establishment of the SPGA coincides with growing attention from the American Gaming Association (AGA), which recently issued a memo warning that certain operators may be using sweepstakes models to sidestep state gambling regulations.
The AGA has called on regulators to investigate these platforms, citing concerns over weak responsible gaming protocols and age verification processes.
The AGA mentioned that, without adequate oversight, the sector could be at risk of illegal activity and consumer harm, urging more stringent enforcement of existing laws.
This development follows other significant moves in the social sweepstakes sector, including the recent launch of the SweepX platform by Gaming Innovation Group (GiG) in partnership with Primero Games.
