Maryland Moves to Ban Sweepstakes Casinos

in Maryland, state legislators have taken a decisive step toward banning social casinos that use sweepstakes prizing. The bill, SB 860, was introduced by Senator Paul Corderman and passed through the Senate Budget and Taxation Committee on March 7 without any opposition. If enacted, this legislation will prohibit the operation, promotion, and support of online sweepstakes games within the state, a move that could significantly impact a growing segment of the online gaming market.

The proposal marks a notable shift in Maryland’s approach to social casinos, which have gained traction in recent years, offering online games that mimic the structure of traditional casino gaming, but with a sweepstakes model that sidesteps certain legal restrictions. These sweepstakes casinos typically operate under a model where players purchase goods or services to receive sweepstakes entries or play for virtual currency, which can be redeemed for prizes. However, as legislators and regulators are becoming more concerned about their potential to act as unregulated gambling platforms, states like Maryland are taking a hard stance against these operations.

Maryland Takes Action Against Sweepstake Casinos

SB 860 is a direct response to increasing concerns about online sweepstakes casinos, which have been subject to growing scrutiny across the United States. Earlier this year, the Maryland Lottery and Gaming Control Agency (MLGCA) took action by sending cease-and-desist letters to 11 websites operating as sweepstakes casinos and sportsbooks. The regulator deemed these websites illegal and ordered them to block access for Maryland residents. Among the companies that responded were Stake.us and Rebet, two major players in the space. However, neither of these operators agreed to comply with the state’s directive at the time, signaling the contentious nature of this issue.

The swift passage of SB 860 through the Budget and Taxation Committee without any debate underscores the state’s commitment to cracking down on these sites. While no formal dissent was raised during the committee vote, advocates of the bill argue that its passage is essential to protect consumers and maintain the integrity of Maryland’s gaming laws. By taking a stand now, legislators are sending a clear message that they will not allow these online games to operate without oversight, effectively drawing a line between entertainment and potentially harmful, unregulated gambling activity.

The state’s move mirrors the growing trend of enforcement against such websites in other parts of the country. As the digital gambling industry expands, lawmakers and regulators are finding themselves caught in the middle of a debate over whether these types of sites are a legitimate form of gaming or a thinly veiled attempt to circumvent gambling laws.

New Jersey’s Changing Stance on Sweepstakes Casinos

In a related development, a similar conversation is unfolding in New Jersey, where the landscape surrounding sweepstakes casinos is shifting dramatically. Assemblyman Clinton Calabrese, a key figure in the state’s gaming discussions, has recently flip-flopped on the issue. Earlier this year, Calabrese introduced a bill aimed at legalizing and regulating sweepstakes casinos in New Jersey, intending to treat them similarly to the state’s existing online casinos. The proposal would have opened the door for these platforms to operate legally, subject to the same regulations that govern New Jersey’s licensed gaming sites.

However, in a significant reversal, Calabrese introduced new legislation just weeks later that would prohibit the sweepstakes model of wagering altogether. His revised bill seeks to establish penalties for unlawful gambling operations and practices and directs the state’s Division of Consumer Affairs and Division of Gaming Enforcement to enforce these measures. This sudden shift raises questions about the evolving perceptions of sweepstakes gaming and what, if anything, regulators can do to strike a balance between innovation and consumer protection.

This about-face has drawn attention to the delicate balancing act that lawmakers in New Jersey, and elsewhere, are facing. On one hand, the desire to regulate and tax new forms of online gaming presents an opportunity to expand state revenues. On the other hand, there are growing concerns about the unregulated nature of some of these platforms, which may exploit legal loopholes and expose consumers to potential harm.

What’s at Stake?

The moves by Maryland and New Jersey signal a growing awareness of the potential dangers of unregulated online gambling and the need for stricter oversight. While the Maryland bill seeks to put a definitive end to the sweepstakes model, New Jersey’s shifting stance highlights the broader uncertainty surrounding the regulation of such sites. As lawmakers grapple with the rapid evolution of online gaming, they must balance consumer protection, revenue generation, and the desire to foster a regulated gaming environment that benefits all stakeholders.

The debate is far from over, and the actions taken by Maryland and New Jersey may serve as a precursor to similar measures in other states. With more regulators stepping in to challenge the status quo, the future of sweepstakes casinos—both in terms of legality and regulation—remains uncertain.

As the industry evolves, one thing is clear: states are not willing to sit idly by while the online gaming sector continues to operate in a legal gray area. For both operators and consumers, the next few years could see a significant shift in how sweepstakes casinos are handled across the United States.

 

By taking a stand now, legislators are sending a clear message that they will not allow these online games to operate without oversight, effectively drawing a line between entertainment and potentially harmful, unregulated gambling activity.

Conclusion

Maryland’s swift passage of SB 860 is just the latest in a series of regulatory actions aimed at sweepstakes casinos. With New Jersey lawmakers taking an unpredictable route on the issue, it is clear that the conversation around online gambling is complex and evolving. Whether other states will follow Maryland’s lead remains to be seen, but one thing is certain: the pressure to regulate or shut down sweepstakes sites will only grow in the coming months.