In Michigan, a volatile situation involving social online casinos, also known as sweepstakes casinos, sparked questions across the gaming industry.
Michigan authorities banned Massachusetts-based Golden Heart Games from operating in the state. They deemed it illegal gambling. As a result, there was a domino effect in the industry. For example, Virtual Gaming Worlds, owner of several sweepstake casino brands like Global Poker and Chumba Casino, exited the Michigan market.
However, Michigan has legal online casinos. Lawmakers haven’t passed legislation legalizing Massachusetts online casinos. And it appears that, at least for now, they are legal in the Bay State.
MGC won’t take action, but AG could
The Massachusetts Gaming Commission (MGC) oversees the state’s online gambling operations. Currently, the group regulates Massachusetts sports betting and the state’s three brick-and-mortar casinos.
However, the commission does not regulate the sweepstakes casinos. Thomas Mills, the MGC’s communications division chief, gave PlayMA a breakdown of how the regulation of gambling works in Massachusetts.
“The only forms of legal gambling that the Massachusetts Gaming Commission oversees and regulates include casino gaming at the Commonwealth’s Category 1 (Encore Boston Harbor, MGM Springfield) and Category 2 (Plainridge Park Casino) casinos, simulcasting and horseracing, and both retail and online sports wager,” said Mills. “Online casino gaming is not legal in the Commonwealth of Massachusetts. The State Lottery under the Treasurer’s Office oversees the lottery (instant tickets, numbers games) and the Office of the Attorney General oversees daily fantasy sports.”
The Malta Gaming Authority oversees all promotional social sites in Massachusetts and ensures customers are treated fairly and given their winnings promptly. When asked about the possibility of Massachusetts banning sweepstakes casinos, Mills suggested contacting the Massachusetts Attorney General’s office.
Massachusetts Attorney General Andrea Campbell has not made a big stink about social online casinos in the state. Regarding the gambling industry, she has been more focused on cracking down on sports betting ads and ensuring the state’s casinos follow all the rules.
In other words, if there is going to be a ban on sweeps casinos in Massachusetts, it likely won’t happen anytime soon.
What is a social/sweepstakes casino?
A sweepstakes or social online casino offers digital versions of popular table and slots games. What sets them apart from legal online casinos is that social platforms do not use legal currency for wagering.
Instead, they use their own digital currencies that carry no monetary value. However, customers can buy digital currency and redeem it for real cash prizes.
Unregulated gaming sites don’t pay state taxes, and there isn’t much legal aid for players who have issues with an unregulated gaming site. Michigan deemed Massachusetts-based Golden Heart Games a risk to residents.
“Unlicensed gaming robs our schools and our government of essential funding and leaves consumers unprotected,” said Michigan Attorney General Dana Nessel. “When companies like Golden Hearts attempt to circumvent Michigan’s gaming laws, they create the false impression that their games are legal and safe for consumers.”
Supporters of the social casinos would argue that the sites are operating on a sweepstakes model because users aren’t required to buy digital currency, like how online casinos and sportsbooks might require a deposit.