The legal landscape of states battling sweepstakes gaming operators took a turn in Florida this week. Attorney General James Uthmeier (R) not only filed lawsuits against major operators, but also targeted payment processors servicing the companies.
Two suits were filed in Hillsborough County Circuit Court against leading sweeps companies like VGW Holdings, owner of Global Poker, and Stake.us. Uthmeier claims the operators are engaged in illegal online gambling, violating Florida’s law and the state’s Deceptive and Unfair Trade Practices Act, according to WJXT.
“These so-called ‘sweepstakes’ and ‘social casinos’ are illegal online gambling operations,” Uthmeier said. “If it looks like a casino, takes real money like a casino, and pays out like a casino, it is a casino – and it is illegal under Florida law.
“These companies have been preying on Floridians, including minors and seniors, with deceptive marketing and 24/7 access, while dodging our state’s licensing, taxation, and consumer-protection requirements. They must be stopped.”
The lawsuits are seeking a permanent injunction barring the companies from operating in the state.
Ruling Against Payment Processors Could Cripple Industry
Florida is the first state to target payment processors, along with the sweepstakes operators.
Sweepstakes casino platforms allow users to play casino-style slots, table games, and poker using a dual-currency model. That typically involves using gold coins for free play. Users who purchase additional gold coins also receive a separate currency, often known as sweeps coins.
Sweeps coins can be used in separate games and are redeemable for real cash and prizes. The operators argue that they are legal under sweepstakes law rather than traditional gaming law. They contend that their offerings don’t require anyone to pay anything to play.
A ruling against third-party payment processors, however, would all but cripple sweepstakes casinos that use the dual-currency system.
Florida Could Be Next State To Ban Sweeps
As the third-most populous state with 23.4 million people, losing the Florida market could be a major blow to the sweepstakes casino industry.
Other large-population states have already banned the platforms. California passed a law prohibiting sweeps gaming in October, following New York’s lead.
New Jersey banned sweeps operators last August. Montana was the first state to ban sweeps last year. Other states have also targeted these gaming companies in recent months.
Poker Players Affected
Sweeps sites like ClubWPT Gold and Global Poker are the only available online poker options in some states. While online poker and casino gaming are not legal in Florida, the state’s Seminole tribe, which has a monopoly on mobile sports betting in the state, has eyed gambling expansion.
ClubWPT Gold previously operated using a sweepstakes model but changed it in September to stay within the law in California and also to return to the New York market.
The new business model allows players to purchase poker training credits to receive coins, which are then playable and redeemable for cash and prizes. Players are given tips on how to play. The training model setup eliminates the traditional dual-currency sweepstakes model. However, one leading legal expert believes the format is still illegal in California.
