VGW, the parent company of Chumba Casino and Luckyland Slots, will terminate its promotional sweepstakes product in New York starting next month. VGW has made similar concessions in states looking to ban online sweepstakes casinos.
Key Insights:
- VGW is terminating its sweepstakes offering in New York but will still offer its free-to-play games
- VGW has been responsive to states looking to ban sweepstakes operators
- VGW players will be given time to redeem the company’s Sweeps Coins
New York online casinos offer a popular form of gaming for gamblers in the Empire State. However, the state is one of many that are looking to stem the growth of largely unregulated sweepstakes operators.
The state currently has two bills that would ban sweeps.
Bill S5935A unanimously passed out of the New York Senate Racing, Gaming, and Wagering Committee and is now in the hands of the Senate. Meanwhile its companion bill, A6745A has yet to make meaningful progress in the Assembly.
Sweepstakes gambling sites allow customers to wager with free coins. The additional coins, however, can also be purchased with real money and/or cryptocurrency and exchanged for cash and prizes. These types of online casinos, which are unlicensed and unregulated, have recently come under fire from lawmakers and regulators.
Even though there is still a chance that New York’s sweeps bills will die before the end of the legislative session, VGW has confirmed the exit of its sweeps product from the Empire State.
“We can confirm that following careful consideration, we’ve informed players of a decision to phase out Promotional Play (sweepstakes promotions) in the state of New York,” a VGW spokesman said. “Players will still be able to enjoy all their favorite free-to-play games using Gold Coins, and we are 100 percent focused on ensuring players are fully informed about the changes, and that this transition is as smooth and seamless as possible.”
VGW relatively cooperative with state regulators
VGW is based in Australia but has operated in North America for more than a decade. Its business, however, is receiving more scrutiny in the U.S., as several states consider banning the, currently unregulated, sweepstakes gambling model.
While the company disagrees with states over the legitimacy of its sweepstakes operations, it has complied with regulators. For instance, when it voluntarily left the Delaware market, a company spokesperson said, "VGW stands by its online, casino-themed, free-to-play social games and sweepstakes promotions and continues to believe they comply with Delaware law, as well as the laws of all other jurisdictions in which those games continue to be offered."
Along with New York and Delaware, VGW exited the Montana market prior to the state’s passage of a law banning sweepstakes gambling. The company has also left Connecticut, Washington, Michigan, Idaho, and Nevada.
VGW’s willingness to comply with state regulators may be a sign that the company is playing the long game. VGW may wish to seek state gambling licenses down the road and cooperating now may facilitate that strategy.
