The Indian Gaming Tradeshow & Convention provided attendees with the opportunity to discuss and learn about topics impacting tribes and other key stakeholders.
A group of industry leaders spoke during an educational session at the convention about fair play and fighting back against unregulated sweepstakes operators and offshore sites.
The discussion, moderated by Closing Line Consulting analyst Dustin Gouker, included American Gaming Association Vice President of Government Relations Tres York and California Nations Indian Gaming Association Chairman James Siva.
The panel discussion also included Crowell Law Office Founding Partner Scott Crowell and Light & Wonder Global Head of Government Affairs Howard Glaser.
Sweepstakes drawing attention
Unregulated online sweepstakes operators are drawing the attention of gaming companies and regulators nationwide with many circumventing state laws and regulations to provide players with gaming options that offer no safeguards or fair play standards.
The unregulated operators are considered a hindrance to tribal communities nationwide.
“In California, it really popped up a few years ago or really came on our radar as an actual threat and as we learned more about what was happening and how quickly it grew then it became a priority for us,” said Siva. “Because in California, the main thing that we try to protect is our gaming exclusivity. In California, tribes are the exclusive operators, period.”
The popularity of unregulated sweepstakes has reached California, one of America’s largest economies with a gaming market established through tribes.
“It’s astonishing that the California Attorney General has not acted on this because this state could put a stop to a lot of it,” said Glaser. “No one has more to lose than tribes.”
Lost profits for tribal communities
Unregulated sweepstakes operators have drawn backlash for taking away profits from licensed brands as they spend revenue to acquire customers and expand their reach.
“Sweepstakes in the last two years has built the volume with the amount of money that’s invested in the growth of these platforms. It’s mind-boggling. It’s not just an intrusion on tribal sovereignty. It’s also siphoning away tribal gaming dollars,” said Crowell.
Critics also argue that nregulated online sweepstakes are promoting unfair business practices.
“It’s the largest source of money laundering that exists today internationally because all you have to do is set up a website, say it’s not gambling, evade the law for as long as you can and send billions of dollars at cyberspeed,” added Glaser.
Taking steps to shutter unregulated operators
Regulators are combating the prevalence of unregulated sweepstakes operators by issuing cease and desist letters ordering the shuttering of operations or an exit from a market.
“Without these regulations you allow these industries to grow. They’re able to take control of a market without any regulation, without any rules,” continued Siva.
Regulators in Virginia, Connecticut, and Michigan have taken recent steps to combat unregulated sweepstakes by ordering their exit in the midst of legal repercussions.
“There’s going to have to be real backbone on the behalf of the regulators, if they can, and if not, then the Attorney General can say ‘We can take you to court,” said York. “I think as this process plays out, you will be seeing more of that.”
Unregulated sweepstakes will continue to be a hot topic of discussion for tribes and leaders in the gaming industry. Regulators and local governments will fight back against unlicensed sweepstakes operators as they attempt to drive profits and acquire new customers.
