On the latest episode of iGaming Daily, Jessica Welman, Editor of SBC Americas, was joined by Bill Gantz, Partner at Duane Morris LLP, to unpack the legal complexities of the debate ‘sweeping’ the US.

Sweepstakes casinos have risen in popularity in recent times, however, opponents of the vertical argue that they are unregulated casinos masquerading as social casinos. In many states, there is a lack of legal clarity surrounding sweepstakes.

Gantz explained that sweepstakes casinos are a subset of freemium operators which means that they offer both free and paid-for features.

“In the US, it’s lawful in virtually every state to use sweepstakes to promote a product, service or brand with a sweepstakes giveaway,” Gantz continued.

“The general rationale for all sweepstakes in the US is simply that although there is a chance and a prize, there is no consideration for the sweepstakes because no purchase is necessary to enter or win. Free entry is the basic premise of legality for every sweepstakes in the United States, including the ones that are being offered by what is being called sweepstakes operators.”

Several lawsuits have been filed against sweepstakes casino operators, including in New Jersey. Resident Julian Bargo has brought Racketeer Influenced and Corrupt Organizations (RICO) Act charges against a number of sweepstake casinos, as well as Apple, Apple Pay, Google and Google Pay, in a suit.

Bargo claims that he has lost more than $1,000 across a range of sweepstake casinos.

Despite these cases being brought against sweepstakes operators, Gantz doesn’t believe that it will solve the debate around the subject.

He said: “The regulators, they can issue cease and desists but I think, as they’ve seen, they have to have a basis under the sweepstakes laws or the gambling laws to write a letter and try to take it to the next level. I think that’s just lacking in a lot of states.

“This is not just about sweepstakes, this is also about freemiums because all of the things that have been said about sweepstakes are also true about freemium. It’s been accused of irresponsible gaming and underage access and all those allegations in the litigation have been raised to freemium only.

“If you want to authorise it, both freemium and freemium plus sweepstakes, then you have to change laws and authorise it and if you want to prohibit it, you have to change the laws to prohibit it.”