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The Pennsylvania Gaming Control Board (PGCB) has issued 18 cease-and-desist letters to online sweepstakes operators as it continues its efforts to eradicate unlicensed and unregulated gaming in the state.
In a recent Gaming Oversight Committee hearing, the regulator emphasized that while these sweepstakes casinos operated with virtual currencies rather than standard monetary wagers, they still fell outside the scope of legal gambling as outlined in the state’s gaming laws.
PGCB Chief Enforcement Counsel Cyrus Pitre further explained that since the regulator lacked the authority to pursue legal proceedings as it would with licensed gaming platforms in the state, issuing a cease-and-desist letter was the only option.
Pitre also called it a “whack-a-mole” situation due to the number of sweepstakes platforms frequently popping up. Most of these companies are based overseas, but there are a few sites that operate within Pennsylvania.
According to a Play Pennsylvania report, all 18 recipients of the letter have complied.
PGCB Admits Lack of Power to Handle Sweeps
As the PGCB continues efforts to clean up the state’s gaming market, the limitations of the current gaming legislation have become truly apparent.
PGCB Chief Counsel Steve Cook highlighted a specific language in Chapter 13B of the Gaming Act as one of the hurdles preventing meaningful enforcement action against unlicensed operators.
“It is important to recognize the board is not a law enforcement agency, and as a result, we are powerless to bring a criminal case challenging anyone operating one of these illegal gambling operations. The board can, however, pursue administrative and civil remedies when appropriate,” he stated.
The definitions of “interactive gaming” and “slot machines” in these acts are written to be limited to licensed platforms, explicitly banning illegal gaming in their given veritcals.
“Therefore, when the definitions are used in conjunction with the prohibitions, the result is nonsensical prohibiting conduct, which, as per the definitions, is already authorized,” Cook explained.
To further worsen the regulator’s stance, the courts have previously sided with these skilled game operators, which they believe to be illegal. With the Supreme Court currently seeking clarity on the issue at the request of the Attorney General, the PGCB would have to stick with cease-and-desist letters as its only move.
Apple, Google, and Microsoft Contacted
As the battle rages on, Pitre has said that he understands the limitations faced by the regulator, but they would continue the push to eliminate sweepstakes casinos from the market.
“Sweepstakes casinos, despite their misleading presentation, are in our assessment illegal online gambling. To combat this, rather than solely referring individual cases to law enforcement, we’ve adopted a proactive approach. The bureau investigates these sites they found illegal. The Office of Enforcement Council issues a cease and desist letter,” he stated.
“To date, we’ve issued approximately 18 such letters, all of which have been promptly complied with. However, the sheer volume of these sites creates a whack-a-mole scenario. For every site we manage to shut down, countless others emerge or become operational each day.”
Pitre also noted that the companies are under no obligations to comply with the directives. However, reports from local media state that they have already done so.
The Office of Enforcement Counsel, which Pitre heads, has also reached out tech giants Apple, Google, and Microsoft and asked them to remove these sweepstakes apps from their platforms.
SPGA Hits Back
However, the PGCB announcement has been criticized by certain stakeholders who argue that banning social sweepstakes not only impacts entertainment but also threatens a growing digital sector that contributes to job creation and tax revenue.
They contend that such restrictive measures could deter investment in Pennsylvania, hindering local economic growth and innovation.
The Social and Promotional Games Association (SPGA), which advocates for many of the targeted operators, has also shared its concerns on Pennsylvania’s regulatory stance.
The organization claims that the state’s actions diverge from national trends, noting that lawmakers in states like Arkansas and Maine have recently rejected proposals to restrict sweepstakes casinos.
According to the SPGA, these decisions affirm that “properly structured promotional sweepstakes are both legal and safe,” highlighting the broader implications of the ongoing regulatory debate.
However, the SPGA stance might not be entirely rigid, as multiple states have also pushed to outlaw sweepstakes this year. Last month, both New York and New Jersey introduced bills to ban the vertical. Additionally, the Mississippi Senate approved a bill to ban these sweepstake operators in early February, which indicates a growing sentiment among various states to eliminate the sector.
Source: Next.io
