Maine’s Gambling Control Unit warned residents about the pitfalls of playing with unregulated and unlicensed online sweepstakes casinos that offer dual-currency systems and real-money payouts.
Forewarned is Forearmed
Maine launched its mobile sports betting industry in November 2023, but that does not mean it has allowed iGaming, also known as online casino gambling, which includes digital slots and virtual casino table games such as blackjack, roulette, and baccarat.
Online sweepstakes casinos have come under scrutiny in recent months, with several state attorneys general issuing cease-and-desist letters to sweepstakes operators. The providers of these companies allow users to play for free using tokens, but customers can then pay for additional tokens that may be turned into cash upon winning a prize.
These operators do not fall under the purview of state regulators charged with monitoring and governing mobile sports betting companies and those iGaming platforms in the seven states in which it has been legalized. The sweepstakes operators pay no taxes to the states to operate within their boundaries and are essentially vying for the same gambling dollars for which legal sites are constructed.
Maine Sounds the Alarm
Maine’s Gambling Control Unit (GCU) issued a press release that stated, “Numerous unregulated entities continue to target Maine residents, offering illicit iGaming opportunities. These operations, based out of state and often out of the country, include sites that may appear legitimate but lack any regulatory oversight in Maine.”
GCU’s Executive Director, Milton Champion, also issued a statement that read, “These sites may appear legitimate, but none are licensed or regulated by the state. No online casino, iGaming, or sweepstakes site is authorized to operate in Maine. Of particular concern are so-called ‘sweepstakes’ or ‘social casino’ sites that may offer real-money payouts, dual-currency systems, or prizes such as gift cards. These platforms are not licensed or overseen by the GCU.”
A Growing Trend
Maine is just the most recent in a string of states warning its residents of online casino sweepstakes operators, and New York’s Attorney General Letitia James recently issued 26 cease-and-desist orders, followed by New York’s legislature advancing a bill that would ban them from the Empire State.
Four states have already passed anti-sweepstakes gaming packages, including Connecticut, Louisiana, Montana, and Nevada. However, Louisiana Governor Jeff Landry vetoed the bill, describing it as unnecessary based on the amount of policing the state has already implemented to keep offshore operators and sweepstakes casinos out of the market.
Sweepstakes Cry Foul
Although Maine has yet to pass a bill banning sweepstakes companies from operating in their jurisdiction, the recent missive from Maine’s gaming enforcement agency was enough to gain the attention of industry trade group the Social and Promotional Games Association (SPGA).
The SPGA believes its members have been unfairly targeted and are lashing back at the agencies trying to eliminate them from operating in U.S. markets. The organization insists many of the sweepstakes companies are US-based and do pay taxes, although not to the state regulators in which they operate.
The SPGA posted a response on its website to Maine’s warning that stated, “It’s disheartening to see this continued conflation of lawful sweepstakes promotions with unregulated gambling, particularly in the absence of any evidence of consumer harm. We welcome the opportunity to engage with Maine officials in a constructive dialogue to clarify how these platforms operate, the legal principles they follow, and the safeguards in place to ensure they serve the public responsibly.”
