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Pragmatic Play has decided to stop licensing its games to US sweepstakes operators, days after it was named in a lawsuit against Stake.us in Los Angeles.
This move, which was first reported by NEXT.io, marks the company as the first major provider to withdraw from the controversial sweepstakes casino sector following increased regulatory scrutiny and pressure from traditional gaming operators.
“Pragmatic Play has chosen to discontinue licensing its games to sweepstake operators in US States where restrictions were not already in place, in light of regulatory developments and evolving legislation,” a spokesperson told the news outlet.
“We remain committed to the highest standards of compliance and will continue to engage transparently with regulators.”
An Eye on the Legal Market?
Pragmatic Play’s decision to exit the US sweepstakes market comes days after a civil enforcement action by the City of Los Angeles against sweepstakes operator Stake.us, which implicated several large online casino suppliers, including Pragmatic Play.
Following this, Evolution also withdrew its games from Stake.us in California yesterday (Sep 1).
While this exit is likely a welcome sign for state gaming regulators, Pragmatic Play’s situation is unique. Unlike other companies named in the lawsuit, Pragmatic is not currently active in the licensed US iGaming market, and this could suggest that it’s eyeing an entry into traditional online casino operations in the country.
Being one of the biggest names in the iGaming suppliers world, Pragmatic’s decision to step back from the sweepstakes sector may also encourage other providers to follow suit.
Some companies, like Light & Wonder and Play’n Go, have always opted out of the sweeps market, with the former lobbying aggressively against it.
In a press release published in May, Play’n Go CEO Johan Törnqvist explained why it doesn’t license its games to sweepstakes operators, stating, “Sweepstakes casinos do not operate inside a regulated framework and that’s not something we support. Our commitment to regulated markets is absolute. We will never supply our games to sweepstakes casinos.”
California Sweeps Ban Still in the Works
With Pragmatic Play’s exit now confirmed and other operators still making moves, the push for California’s sweepstakes casino ban, known as Assembly Bill 831, is advancing through the legislature and is now set for a full Senate floor vote.
If approved, this legislation could criminalize various suppliers by making it illegal for any “entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate” to knowingly support the operation or promotion of online sweepstakes games within the state.
Recently, the bill underwent amendments, and the inclusion of the term “knowingly” offers some relief to certain content suppliers. This addition helps those who argue that their control over where their games ultimately end up is limited due to the use of aggregators, potentially reducing their legal liability.
Source: NEXT.io
