What Exactly is the Loophole That Makes Sweepstakes Casinos Legal?

Free-to-play?  Not exactly.

Sweepstakes casinos would not be making the big bucks if that were truly the case.

Unlike their real money casino counterparts, the sweepstakes model employs virtual coins.

What Are Sweepstakes Casinos?

You've probably seen the commercials if living in the U.S.  Big name brands include the likes of Chumba, High 5 Casino, McLuck and Pulsz.

These sweepstakes casinos automatically have a presence in the U.S. market via direct advertising on television and other media outlets, including social media where these brands are especially prevalent.  The real money online casinos typically hold an international gaming license from jurisdictions such as Curacao and Malta (the big worldwide iGaming licensing hubs).  The United Kingdom's Isle of Man is another gaming licensing hub that tends not to allow sites that target the U.S. market.

Anjouan is fast becoming one of the leading real money online casino hubs.

When individuals play Sweepstakes Coins games, they can win more, and when they accumulate a required minimum amount of Sweepstakes Coins, they can be redeemed for cash prizes. The process of turning your winnings into prizes like gift cards or even cash prizes can differ from site to site but often involves a similar path. Ultimately, individuals are spending money to purchase coins in exchange for a prize.

To get a feel for how the sweepstakes online casino model work, one can simply check out reviews online from actual customers explaining the process.

There is that "free" component that quickly turns into pumping actual money into the casino (via virtual coins).

We won't name the sweepstakes casino here but these are just some sample reviews that mention the "free" to "purchase" evolution:

"The games are extremely fun and exciting and I enjoy playing them but since ....by advertisers as a casino that requires no purchase necessary, you almost have to purchase something on the app in order to have an experience that last longer than an ice cream headache! They don't reward enough free play."

"The very fun app! And has a lot of fun games and it has a lot of new games constantly coming in. You actually can win real money and although I've never won anything over $1,200 at one time I find that it's a lot of give-and-take some days you win, some days you don't! They do give me a lot of money comp at least once a week I get at least 25 to $30."

"Have a great time playing the games, but the sweepstakes coins are hard to come by, sometimes."

"It was good at first but now it sucks it won't let me log in and I have tried everything and I spent a lot of money on the game now I don't have any way of getting back."

You see where we are going here.  The "free' component only lasts for a bit before real money action begins to kick in.

And just like the real money online casinos, these sweepstakes casinos do ask for your banking info.

"I keep getting a hard time adding my bank information. They keep saying I need this or I need that. I've been playing with my monies and not getting progress from ****."

So What's the Loophole?

Because these sites do not require real money deposits, sweepstakes operators insists the sites are fully legal.

All sweepstakes casinos use some form of virtual currency for their players to enjoy social casino games, without needing to make a purchase.

But as noted above, this doesn't last long.  Real money is soon being pumped into these games.

Some state regulators are looking to put an end to the sweepstakes casino presence.

Senator Joseph Addabbo, the Chair of the New York State Senate Racing, Gaming, and Wagering Committee, has announced his intention to push for a ban.

“One of my primary objectives as Gaming chair is ensuring New Yorkers are protected from gambling operations that have the potential of becoming more problematic without proper legislative action, such as unregulated sweepstakes casino operators,” stated Addabbo. “Many sweepstakes' operators are located offshore making enforcement limited or impossible, and our most vulnerable populations, youth and elderly, are most often targeted, which is why I want to act to address this existing loophole,” Addabbo added. The Senator expressed that the sweepstakes operators are allowing individuals to pay for virtual coins and win more coins that can be redeemed for cash prizes. “The use of money to play a game and win more money is simple gambling and should be safely regulated,” Addabbo said.

“To close this loophole, I will work to ban or incorporate Sweepstakes Casinos in the state, akin to current laws in Michigan, Idaho, and Washington, and I will push for iGaming as a safe, effective alternative for online casino enthusiasts,” Addabbo explained. “By addressing the Sweepstakes Casinos issue and allowing a regulated iGaming casino option, we are demonstrating our commitment to protecting New Yorkers, dealing with gaming addiction, while adding tax revenue beneficial to all state residents,” Addabbo explained. “Without an option for safe, regulated online gaming, many individuals will fall victim to sweepstakes casinos that entice customers through free play advertising with the potential for prizes through the purchase of gold coins,” added Addabbo. “I encourage my colleagues and the Governor to take action against unregulated sweepstakes casinos, while reconsidering the benefits of allowing legal iGaming operators to provide sanctioned services in a popular and ever-growing industry,” concluded Addabbo.