The recent introduction of a measure in Maine that aims to ban certain online sweepstakes sparked discussion on the matter between the public and a government committee.
On Wednesday, the Maine Joint Committee on Veterans and Legal Affairs held a public hearing to discuss a series of gaming-related bills that were introduced for the state’s second regular legislative session, including the ban on sweepstakes.
The joint committee discussed Legislative Document 2007, a bill proposed by Sen. Craig Hickman that bans the operation or promotion of dual-currency sweepstakes.
LD 2007 defines an online sweepstakes game to be any game or contest that is available online and uses a dual-currency system of payment to simulate casino-style gaming, lottery, bingo or sports wagering. Under LD 2007, a dual-currency system of payment “allows a person to play or participate with direct consideration or indirect consideration.”
The system also “prevents a person from directly purchasing coins, tokens or other representations of value that are redeemable for any cash prize” or encourages a person to purchase coins or tokens that are not exchangeable for a prize, award or cash.
Active support of a sweepstakes ban in Maine
The Maine Gambling Control Unit (MGCU), which is part of the Department of Public Safety, voiced its support of LD 2007 as online sweepstakes accept customers in the state.
“This [online sweepstakes] has been going on for over a year now,” MGCU Executive Director Milton Champion told hearing attendees. “We know they’re [online sweepstakes] operating in Maine right now. You can go to any one of their websites and even organizations publicize that.”
Members of the joint committee raised questions about what constitutes a dual-currency system and how that relates to products that are currently offered in Maine. Champion compared the sweepstakes in question to gambling that must be state-regulated.
“Once you make a deposit or pay to play in order to win something of value, that’s gambling,” continued Champion. “And that’s in our current statute.”
DraftKings also attended the joint committee hearing, with the Boston-based operator supporting LD 2007 and its goal to prohibit the offering of dual-currency sweepstakes.
Maine is an important market for DraftKings as the company is one of two licensed online sports betting operators that are authorized to accept customers in the state. DraftKings offers online sports wagering in Maine through a deal with the Passamaquoddy Tribe. Caesars is the operator’s only competition for online sports betting in the Pine Tree State.
DraftKings opposes online sweepstakes as they pull away customers from licensed brands.
“Maine has taken a step forward in legalizing a framework for online casino gaming that prioritizes consumer protection, responsible gaming and regulatory oversight,” said DraftKings Senior Director of Legal and Government Affairs Kevin Cochran. “Unregulated sweepstakes-style casino platforms operate outside of that framework, drawing players away from licensed operators and undermining the intent of the law. This legislation would help close that gap.”
Last week, Maine Gov. Janet Mills approved a measure to legalize online casino gaming.
SGLA member wants to keep sweeps alive in Maine
Virtual Gaming Worlds (VGW) emerged as an opponent of LD 2007 as one of the largest sweepstakes gaming providers in the world, with a valuation of approximately $2 billion. VGW believes a ban on online sweepstakes in Maine could stunt growth in gaming.
“By banning these social plus games, Maine will be setting a precedent that any future interactive innovation interested in entering the state could be blocked,” said VGW Chief Growth and Strategy Officer Llyod Melnick during the hearing. “That could even include things like daily fantasy and other opportunities like historical horse racing.”
VGW also believes online sweepstakes can allow Maine to maintain its status as a “forward-thinking state” that allows industry disrupters to solidify a presence. The Australian sweepstakes giant also wants to provide Mainers with more entertainment options.
“It shouldn’t come down to who has the most influence, but who delivers the best games and player experiences to people who want to play,” continued Melnick.
VGW also address concerns of dual-currency systems by sharing that the majority of its players, with most ranging between the age of 35 and 54, never spend real money.
“The majority of our players never spend a penny and they get the exact same experience,” continued Melnick. “That’s what really defines the social plus category.”
The Social Gaming Leadership Alliance (SGLA) also voiced its opposition to LD 2007. Its membership includes VGW and Publishers Clearing House owner ARB Interactive.
“If the language of SP 825 [LD 2007] is passed, the outcome will be sadly predictable—the law-abiding operators will exit the state, but illegal operators will stay and prey on unsuspecting Maine consumers,” said SGLA Managing Director Sean Ostrow. “Social Plus operators offer real consumer protections that keep minors from playing, that protect consumer data and finances, and that encourage responsible social gameplay.”
The joint committee will continue to discuss LD 2007. The group is set to hold a policy workshop to provide education on sweepstakes and how it relates to Maine’s gaming market. The workshop will include both lawmakers and key stakeholders in gaming.
