Maryland House Ways And Means Committee Does Not Vote (Yet) On Sweeps Ban Bill

Sweepstakes casino operator representatives may have done enough during the day Tuesday to get House lawmakers in Maryland to consider amendments to HB1140, as the lower chamber’s Ways and Means Committee did not bring the bill up for a vote later that evening.

Josh White, who spoke on behalf of sweepstakes operator VGW, and attorney Jeff Ifrah, representing the Social and Promotional Games and Association (SPGA), spoke at length against Del. Eric Ebersole’s bill that proposes to ban sweeps. The pair argued the legislation was too broad and would have unintended consequences for non-gaming companies that utilize sweepstakes promotions as part of their marketing efforts.

Earlier this year, the Maryland Lottery and Gaming Control Agency sent cease-and-desist letters to 11 sweepstakes casinos and sportsbooks, declaring the websites illegal and demanding they block access to Maryland residents. While the agency didn’t identify the operators, The Closing Line reported Stake.us and Rebet were among the six that responded, though none agreed to comply with the state’s demands at the time.

The Old Line State is also considering legalizing online casino gaming and historical horse racing, which has contributed to the effort by lawmakers to ban sweepstakes casinos.

The Senate bill cross-filed with HB1140, SB0860, unanimously passed through the upper chamber’s Budget and Taxation Committee last Friday.

‘Force these illegal competitors out of our state’

Ebersole linked sweeps casinos to “black market websites” that receive an estimated $6 billion in wagers annually from Maryland residents, saying the contests “are in fact unregulated and untaxed gambling.”

“The legislation will force these illegal competitors out of our state and and provide a powerful deterrent to offshore and domestic illegal online gaming from entering our state,” Ebersole added. “I will point out that lottery and gaming has actually weighed in on this one, not just information, they are in favor of this bill.”

Ebersole was flanked by Brad Rifkin, who spoke on behalf of gaming manufacturer Light & Wonder in support of the bill. He added sweeps casinos are both operating “without any guardrails” and “cannibalizing the existing market.” Rifkin also tweaked sweeps casino representatives’ arguments they have made about impacting marketing efforts of non-gaming companies, saying, “Frankly, if it walks like a duck and quacks like a duck, it’s a duck, it’s illicit gaming.”

White, Ifrah measured in response

VGW is one of the largest sweepstakes casino operators in the U.S. with three well-known sites: Chumba Casino, LuckyLand Slots, and Global Poker. It has been in the cross-hairs of state legislators and gaming regulatory agencies and recently raised its minimum age for players to 21.

The rebuttals from White, who represents VGW via KO Public Affairs, and Ifrah centered around what they felt was the broad overreach of Ebersole’s bill. White noted VGW provides “free-to-play digital entertainment enjoyed by thousands of Marylanders” and players who purchase tokens for “enhanced game play” cannot redeem those for money.

“This committee is a leader in digital entertainment,” White told the committee, headed by Chair Vanessa Atterbeary, “and yet this bill is based on misconceptions that would eliminate a well-regulated and legal form of digital entertainment while pushing Marylanders towards unregulated offshore platforms.

“A better approach is regulation, not prohibition. We believe the committee could adopt consumer protections, retain economic in-state benefits, and preserve a popular digital entertainment industry.”

Ifrah was in agreement with Ebersole and Rifkin regarding the impact of illegal offshore gaming, but echoed White’s point that “this bill is so broad in what it defines as it attempts to essentially do away with something that’s legal in Maryland.”

Ifrah added the state already has a statute that “provides the commercial law on promotions and sweepstakes.” Ebersole’s bill, according to Ifrah, “seeks to make something that’s legal in Maryland illegal.”

Unintended consequences

During a back-and-forth between Atterbeary and White related to how VGW performs age verification checks, Ifrah jumped in to point out that Ebersole’s bill would punish the suppliers and payment processors who also perform the same services for major sportsbooks such as FanDuel and DraftKings should they continue to operate for sweepstakes casinos.

“This is not an underground offshore industry at all,” Ifrah insisted. “Now, the online gaming industry that’s operating illegally is offshore and does operate underground and doesn’t do any of those things. But this is all being swept together under one broad basket.”