Illinois Senator Goes After Sweepstakes Casinos

It took a while, but sweepstakes casinos have caught the attention of lawmakers all over the country. This phenomenon has caused such a stir that state after state is looking at regulating or banning access to these "social" casinos. Illinois can now be counted as a state seeking to put a stop to the availability of sweepstakes casinos in Illinois.

What Are Sweepstakes Casinos?

Imagine an online casino that represents itself as a social gaming casino while still giving customers a chance to win prizes, including cash. That would accurately describe a sweepstakes casino.

It works as follows: customers will receive or can buy "sweeps" tokens. The tokens can be used to win more sweeps tokens or to enter special drawings. Once a customer has a certain amount in tokens, which act as virtual currency, they can redeem their tokens for special prizes or cash.

State lawmakers are concerned about said casinos for two reasons. First, the use of virtual currency as a mode of financial exchange has not yet been legalized in the U.S. Second, the notion that players can win prizes and cash is, by definition, gambling. Casino gambling has only been legalized in seven (7) states. Oh, online casino gambling is illegal in Illinois.

Illinois Senator Proposes Bill Banning Sweepstakes Casinos

Illinois State Senator Bill Cunningham filed HB 1705 in the early part of February. The bill proposed to expand the state's legal definition of "gambling" to include sweepstakes-based devices, more specifically, online sweepstakes casinos. It also sought to completely ban access to said casinos.

While the bill in its original form got little attention, Sen. Cunningham recently added an amendment that further clarified the original bill's intent. The amendment's language was amended from “through the use of a gambling device” to now say “through the use of a gambling device or by means of the Internet”. That clarity has drawn the interest of at least four (4) committees.

It's important to note that HB 1705 does not seek to ban social casinos. A basic social casino will allow customers to play casino games of chance without the ability to earn monetized rewards. It only seeks to specifically ban sweepstakes casinos that use virtual currency with the possibility of winning cash and prizes.

These actions a very similar to the actions being taken in other states. Currently, about 40 states permit their residents to access sweepstakes casinos. That's about to change as sweepstakes casino banning/regulating legislation has been or is in the process of being filed in states like Louisiana, Maryland, Mississippi, New Jersey, New York, and West Virginia. This list of states is likely to expand in the next few months.

All of this activity signals that U.S. lawmakers are getting very sensitive about the use of "illegal" online gambling sites. The line is being drawn in the sand, and it will be interesting to see what unfolds in the coming months.