Gaming Attorney: Sweepstakes Casinos Violating California State Law 'Not Even a Close Call'

• Sweepstakes casinos come under fire by legal gaming sector in US.

• Noted gaming attorney claims, in California at least, they are clearly not legal.

• Catena Media layoffs and XL Media disposes of North American business.

• Integrity Boss Out.

Sweepstakes Casinos

Gaming Attorney: Sweepstakes Casinos Violating California State Law 'Not Even a Close Call'

Noted gaming attorney Daniel Wallach has chimed in on the outcry over so-called "sweepstakes" or "social media" casinos and their legality.

The sites claim to be free-to-play, but it doesn't take a business genius to realize a company cannot survive by giving the shop away while amassing huge costs to operate over the internet.

"Sweepstakes casinos" essentially offer new players a casino welcome bonus of free coins with no purchase necessary. Players can then wager Gold Coins on casino games for entertainment, while wagering free Sweepstakes Coins allows players to win real cash prizes.  So there you have it, this eventually leads to betting with real money.

From Wallach:

"California is the most vulnerable state for sweepstakes casinos. 1) Bad case law on consideration 2) A ban on “gambling-themed” sweepstakes 3) A constitutionally enshrined public policy against casino gambling 4) Broad reach of gambling statutes 5) Payment processor exposure.

"So bad in fact that California should automatically be listed as the first “excluded state” in the T&Cs of every dual-currency sweepstakes casino and sportsbook operator. It’s that clear-cut.

"To avoid classification as an illegal lottery (even though there’s 'money-in' and ‘money-out’), the sweepstakes casinos attempt to "separate" the consideration from the chance to win real money by inserting a "straw man" between the two elements - i.e., the purchase of a product.

""Sweeps use a dual-currency system consisting of Gold Coins and Sweeps Coins. When you buy Gold Coins – which can only be used for nonredeemable play – you also get an allocation of free Sweeps Coins, which CAN be used to play casino games for cash prizes."

"Gaming Industry Rivals Unite Against Sweepstakes" was the headline that appeared this past week, spotlighting how sportsbook operators and the tribal casinos have united to abolish this "scourge".

"Just two short years ago, the SBA and the IGA were at each other’s throats," Brett Smiley notes in his story for Casino Reports.

Gaming analyst Alfonse Straffon just rolled his eyes at the drama.

"Seeing the pitchforks going after the sweepstakes folks does make me chuckle. Y'all want to know why? Because for the longest time offshore and local bookies were the 'bad guys'... and now I get to see many of those folks eat their own mud (to be polite) they have flung around."

Gambling News

XL Media Disposes of North American Business, Becomes Cash Shell, Catena Media Layoffs,

(Alliance News) - XLMedia PLC on Monday announced it has entered into a conditional agreement for the sale of its North America business to Sportradar AG, rendering the company a cash shell after its completion.

Shares in the London-based sports digital media company were up 37% at 12.72 pence each in London on Monday morning.

The group said the USD30 million disposal was subject to shareholder approval at a general meeting on November 7. Sportradar, a Switzerland-based sports data business, now holds around 31% of the XLMedia share capital, to instruct a vote in favour of the resolution.

This follows the USD42.5 million disposal of the company's Europe and Canada assets to Gambling.com Group Ltd in March. The North America business was the sole remaining material asset in the group, alongside small residual income from an unsold legacy network business in Europe.

However, XLMedia said: "While it was confident that the US market would provide long-term success for a larger organisation, the board believes XLMedia's current scale on a standalone basis could impact its ability to compete in the evolving US market. In addition, the board is mindful that following the Europe disposal, the continuing business of the North America business may be considered too small to remain listed".

The North America business generated USD27.5 million in revenue, and USD5.5 million in adjusted earnings before interest, tax, depreciation and amortisation in calendar 2023.

Following the disposal, XLMedia will become an AIM rule 15 cash shell, focused solely on the distribution of proceeds to shareholders from the North America, Europe and Canada disposals.

Chair Marcus Rich said: "In an ongoing commitment to maximise shareholder value, following the Europe disposal, the board is pleased to have reached an agreement to sell the North America business to Sportradar pending shareholder approval. We anticipate an initial distribution from the net proceeds to shareholders before year end."

Furthermore, there are reports that another of the big US gaming affiliate media companies is laying off staff.  That would be Catena Media.

These reports are now being confirmed by John Ferguson of Catena Media.

"We lost a lot of quality colleagues yesterday from the content team at Catena. Some I had the fortunate opportunity of working closely with every day and came to know as friends like Valerie Cross, PhD, Daniel R., Chris Jonat, Dave Briggs, Steve Schult and Grant Lucas to name a few but unfortunately not all.

"If anyone is looking for high-quality talent in the iGaming industry, please consider reaching out to any of these folks you see suddenly open to work before someone else picks them up. Talent like this will not remain available long.

"And to any of you affected by this cut, please do not hesitate to reach out to me if there is anything I can do to help you or even if you just want to talk. Having been on the wrong side of a layoff before, I know the feelings you’ll go through. But know that you are each rockstars in your own right and will undoubtedly end up better than you were to begin with."

A bunch of people were laid off at my old company, Catena Media, this week. If you need someone (especially in content) or know someone who does, please share this document with them. https://t.co/igmoNYAWtj

— Dustin Gouker (@DustinGouker) October 24, 2024

Gambling News

No More Integrity

The CEO of a gambling integrity firm has been dumped.

US Integrity founder Matt Holt has been out of a job over the past two months.  But who knew?

To make matters worse, the company currently is without a CEO.

A strange set of affairs considering that Sports Illustrated inn 2023 named Holt the #5 Most Interesting Suit in college football. Prior to founding U.S. Integrity, Holt worked for CG Technology as the VP of Business Development.

U.S. Integrity and Odds on Compliance announced its merger a year ago and later fully rebranded as IC360. Holt transitioned from CEO of U.S. Integrity to CEO of the combined company.

No explanation was given as to why US Integrity and Holt parted ways.

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