Louisiana Attorney General Liz Murrill (R) has declared that dual-currency online sweepstakes casinos are in violation of the state’s gaming laws.
Louisiana is now the fourth state to outlaw sweepstakes casinos, joining Michigan, Montana, and Washington.
Key Takeaways
- The Governor recently vetoed a bill to ban sweepstakes casinos
- The Attorney General said that the platforms violated multiple standards of Louisiana’s gaming laws
- Louisiana recently raised its sports betting tax rate from 15 to 21.5 percent
Murrill’s decision was prompted by Sen. Rick Edmonds (R-District 7), who requested her opinion on June 18.
That was shortly after Gov. Jeff Landry (R) vetoed legislation that would have banned sweepstakes casinos, claiming that the Louisiana Gaming Control Board had already taken action against illegal operators. He also said that the bill was “redundant” since plans to deal with illegal operators were being created.
“Following a review of applicable Louisiana statutes and legal precedent, it is the opinion of this office that online businesses offering casino-style games – purporting to be sweepstakes or social gaming platforms – are operating in violation of Louisiana law,” Murrill said in her decision. “These activities constitute illegal gambling and illegal gambling by computer under multiple provisions.”
Murrill noted that Landry’s signature on the anti-sweepstakes casino bill would have helped, but also said that her office has the authority to enforce penalties associated with breaking the law.
Possible penalties for operators include up to five years in prison and a fine of up to $20,000.
The key differences
Online sweepstakes platforms are not like traditional online casinos. They allow but do not require customers to make deposits to play games and use coins as their native currency. Players compete for prizes such as coins, gift cards, and items, instead of cash.
Despite the distinction, Murrill said that the offering of traditional casino games and the ability to purchase coins with cash made them illegal without licensing.
“While the operators claim these games are promotions in nature, users may purchase ‘Gold Coins’ and receive ‘Sweeps Coins’ ‘as a bonus,’ typically in the same dollar amount as the purchase, which can then be used to play games and be redeemed for cash or valuable prizes,” she wrote.
Murrill also called the name sweepstakes casinos “misleading” since they operate year-round and do not promote an actual business. They also lacked general safety standards such as age and geolocation verification.
Changes to Louisiana’s gaming laws
The prohibition of sweepstakes casinos isn’t the only change Louisiana recently made to its gambling industry. It approved legislation that increased the sports betting revenue tax rate from 15 to 21.5 percent and allocated a quarter of all tax revenues to athletics programs at Division I programs across the state.
State lawmakers last December also opened conversations regarding the legalization of online casinos. Currently, only seven states, none below West Virginia, authorize these platforms.
No online casino legislation was put in front of Gov. Landry.
