A new partnership between social casino operator High 5 Casino and geolocation firm Xpoint illustrates how the U.S. online gambling industry is shifting.
Xpoint noted in a statement that the deal to integrate the provider’s geolocation compliance technology into High 5 Casino’s platform will allow the operator to ensure it remains fully compliant with evolving state requirements and that play is “restricted to appropriate jurisdictions.”
Xpoint already works with numerous sports betting, online casino, sweepstakes and daily fantasy sports (DFS) operators, including the likes of bet365, DFS giant Prize Picks, sports betting exchange Sporttrade and online casino brand PlayStar.
“As one of the most established gaming brands in the U.S., we take compliance incredibly seriously,” said High 5 Casino’s VP of Product Gino Fratto. “Our players trust us not only to entertain them but to protect them, and that includes only allowing gameplay from eligible locations. After extensive due diligence, we chose to partner with Xpoint because of their deep expertise, industry leadership, and responsiveness.”
Options shrinking for sweeps operators… and suppliers
The elephant in the room here is that, for social casinos and sweepstakes operators, this industry is not what it used to be. Numerous U.S. states this year have moved forward with bans aimed at the vertical.
California’s new bill, detailed on June 24, is the latest to move to ban those kinds of products outright, but Connecticut, Montana and Nevada have all signed sweeps prohibitions into law this year. New York has passed a similar ban that is awaiting the governor’s signature, while the issue is still on the docket in other states such as New Jersey.
Many more states have targeted the sweeps vertical through cease-and-desist orders from gambling regulators or other authorities, branding them illegal online gaming and seeking to shut them down. High 5 Casino is one of many who have received such notices.
In some states’ legislation that outlaws sweeps and/or social casinos, it’s not only operators targeted but also collaborating parties. California’s bill, for example, is not the only one to specifically name geolocation providers such as Xpoint as companies that could be punished for working with sweeps and social casino operators like High 5. The forthcoming New York sweeps ban would impact suppliers as well.
Seletive sweeps offering requires geofencing
Amid that intense scrutiny of sweepstakes and social casinos, High 5 Casino only offers its sweeps product in certain states.
The operator, which is a member of the Social and Promotional Games Association (SPGA), shut down its sweepstakes casino offering in March in six states that offer legal online casino gaming. As of the time of writing, it lists a total of 15 states in which it does not offer those products, and it is also unavailable in Canada.
High 5 Casino maintains that its sweepstakes-based model is lawful under both state and federal guidelines in the states that have not outriht banned the vertical, but has complied with states’ C&Ds.
With High 5 only operating in certain states and some states legally criminalizing the products, geolocation services have become all the more important to ensure that players are blocked where they should be blocked.
Xpoint’s CEO Manu Gambhir said in a statement that the operator’s parent company High 5 Entertainment approached his firm last October.
“We were excited by the opportunity to help a social casino leader comply with state regulations related to geolocation by integrating our platform, which allows operators to determine player locations using a variety of signals and sensors while also identifying if location fraud is taking place,” Gambhir added.
Fratto added that High 5 believes stringent geolocation protocols should be the norm and hopes other social casino and sweepstakes operators will follow its lead.
