The Louisiana House of Representatives is moving quickly on legislation to ban online sweepstakes casinos, with Senate Bill 181 (SB 181) clearing new hurdles in the lower chamber.
Key Takeaways
- The Louisiana House has advanced SB 181 to ban unregulated online sweepstakes casinos with unanimous support.
- The bill targets dual-currency gambling platforms while exempting legitimate retailer promotions like rewards programs.
- Violators face fines up to $100,000 and five years’ imprisonment under proposed gaming law changes.
Initially introduced by Sen. Adam Bass, the bill cleared the Senate unanimously in April and was approved unanimously by the House Committee on Administration of Criminal Justice last Wednesday. By Thursday, it had cleared the Legislative Bureau without amendment, positioning it for a third reading on the House floor.
If the House passes the bill without amendments, it will directly go to Governor Jeff Landry's desk for signing. This would make Louisiana the second U.S. state to outlaw sweepstakes-style online casinos specifically.
The legislation would reword language that has allowed sweepstakes casinos to operate under the cover of promotional contests, banning them once and for all. SB 181 tries to update Louisiana's gambling legislation by rendering electronic games, contests, or promotions unlawful with a dual-currency payment system to offer players an opportunity to win cash, cash equivalents, or other prizes.
Notably, the bill distinguishes between illegal sweepstakes gambling and legal promotional games by mainstream retailers. During a Senate hearing, Sen. Bass explained that the bill only targets operations that are imitating casino-style or lottery-style gaming, like unregulated sports betting sites, not promotional giveaways.
Sen. Bass stated that the Louisiana Gaming Control Board and the Attorney General's Office are not targeting retail-based rewards programs, which typically offer customers loyalty points or free contest entry.
SB 181 envisions harsh penalties for violators. The bill would hold not only the operators of such platforms accountable but also affiliates, suppliers, software providers, geolocation service vendors, and advertisers involved in advertising or promoting sweepstakes casinos. The crimes would result in fines of up to $100,000 and prison terms of up to five years.
SPGA disagrees with sweepstakes bans
The move mirrors recent actions in Montana, which became the first state to ban online sweepstakes casinos earlier this month. Montana's law broadly defines an online casino as any application or website that conveys gambling information, permits consumers to wager using any currency, and offers payouts.
This recent move represents a growing national issue among lawmakers about the spread of unregulated gambling enterprises hiding in legally gray structures.
The Social and Promotional Games Association (SPGA) and big sweepstakes providers such as VGW have opposed these legislative pushes on the basis that their websites are legal entertainment enterprises functioning under federal sweepstakes legislation.
They contend that their games do not constitute gambling because no purchase is necessary to participate. Still, critics say the sites amount to unregulated, untaxed casinos, present consumer protection concerns, and deprive states of what could be a revenue source.
