Before we jump in to explain the difference between different casino terms and phrases, let’s first understand the concept of sweepstakes promotions in the US used by corporations.
? What is a Sweepstakes?
Sweepstakes are “advertising or promotional devices by which items of value (prizes) are awarded to participating consumers by chance, with no purchase or “entry fee” required in order to win.” Sweepstakes should not involve a consideration element: no purchase should be required and no entry fee for participation can be charged.
Companies such as McDonalds, Publishers Clearing House, Reader’s Digest, Pepsi and Proctor & Gamble are well-known for conducting Sweepstakes promotions while adhering to all the regulations.
A national sweepstakes has these elements in the official rules and disclosures:
- No purchase is required.
- The alternative method of free participation is provided (such as a post box address for letter delivery).
- Complete name and address of the sponsor and promoter of the contest is disclosed.
- Number of prizes, description of each prize, value of each prize, and the odds of winning each type of prize are stated clearly.
- Geographic application and eligibility is disclosed.
- Opening and closing dates are clearly announced.
- How the prizes will be awarded and whether all prizes will be awarded is disclosed.
- Process of selection of winners and the timing is made public.
- Process to obtain a list of winners is disclosed.
Now we proceed to the next logical question: What on earth is a sweeps casino site?
? What are Sweepstakes Casinos?
Sweepstakes casinos offer all casino-style games without requiring a license from a state gambling authority in the US. They do not accept real money deposits per se but operate through virtual currencies often called gold coins and sweeps coins. You can play for fun with the free gold coins you get when you register your account. You may also get some free sweeps coins or you can get them only in promotional purchases (with gold coin purchase packages) or in giveaways and social media competitions. This rigmarole of coins system is to bypass the definition of gambling or lottery. They are also called SC coin casinos or SC Casinos as their popularity grows.
Players can convert eligible sweep coins to real money prizes or gift coupons subject to the terms of each casino. Prize redemption volume is restricted and capped in certain states like NY and FL as required by law. There is also tax incidence for players where needed. All these features are detailed in the casino terms and sweepstakes terms of each site (which is constantly updated).
In short, social casinos or sweepstakes online casinos , provide all casino-style slots table games and other popular gambling games. All popular software game suppliers like NetEnt or Pragmatic Play dot the online casino lobby of a sweeps casino site.
Some of the most popular social casinos in the US inlcude:
These casinos Operate Under the Sweepstakes Laws
Online sweepstakes casinos claim to operate under the sweepstakes laws in different US states. They operate without a need for a state gambling license. As such you will not find a sweepstakes casino gaming site licensed by a Gambling Control Board or by the official Lottery Commission in any state. Many of these sweepstakes casinos operate with licensing in Malta and some other countries. New sweeps casinos with real money prizes are appearing for US players on a regular basis.
If you read the sweepstake terms of a sweepstake casino such as Chumba Casino, you will find these details (version 8.0, updated January 23, 2024):
- This game and platform does not offer real money gambling.
- VGW Games is licensed and regulated in Malta. It also has a sweepstakes department address in Portsmouth, NH for meeting sweep coins request by post in its sweeps rules version 9.0.
- Players need to be 18 years old (legal online casino or online sportsbook gambling age limit is 21 years).
- Games are for “recreational and entertainment purposes only”.
- Gold coin purchases from restricted territories will be voided. Sites like Chumba invariably state this term.
- The T&Cs include a class action and collective arbitration waiver clause that you need to agree to.
? How do Legal Real Money Online Casinos operate in the US?
Legal real money gambling casinos are licensed in 7 states of the US. The state legalizes the iGaming and provides for an elaborate process of license application, approval, rules, taxes, local casino or tribe partnership, compliance, gaming systems evaluation, and responsible gambling measures. These online casinos are like traditional casinos: you deposit and withdraw real money. You wager real money on games, you lose real money, you win real money, and so on. Mobile sportsbooks for betting are also licensed similarly in over 20 states.
- Online casino real money Michigan are live.
- NJ Online Casinos has many operators.
- PA online casinos has top gambling providers, including the BetMGM and Caesars.
- WV online casinos has many casino gaming sites.
- CT Online casinos are legal.
- Delaware mobile casinos are there with limited options.
- Rhode Island mobile casino has one option (Bally Casino RI).
Real money online casinos have a license from the state gambling authority such as the Michigan Gaming Control Board. Legal online casino in the US operate with complete licensing process and oversight only in seven states of the US. Anyone living in 43 other states of the US will need to travel to a regulated casino state to play slots or live casino games on the smartphone. Social gaming sites are exploiting a legal loophole to provide the same real money games only with convoluted virtual coin and currency methods for prize redemption. Gold coins and free sweeps coins offered by sweepstakes casinos have elaborate and often confusing terms and conditions that players have to meet if they plan to win real money from the prizes.
Some sites like the horse-racing powered Horseplay casino offer real money games to only 21 years olds in 18 states. It brands itself as a ‘real money games’ site to avoid any conflict with slot gaming definitions in some states for its “spinners”.
? Are Sweeps Casinos Legal in the US?
Hmm, yes. They are, until they are not. States individually will need to change laws to regulate their operations. Michigan did that most recently and banned major social casino brands by sending them legal notices.
Gambling authorities are not regulating social casinos as of now or there is no clear trend on this. States like Michigan have asked such companies to cease and desist operations. Florida and New York have certain restrictions related to the sweepstakes prize volume. There has been no national debate and scrutiny on how these sites are not akin to gambling. Online sweepstakes casinos claim that they operate under the US Sweepstakes laws and do not need a casino license from a gambling authority. Sweepstakes casinos are available online for most of the US states therefore. There have been some court cases and awards in some cases but there is no national legislation to regulate them.
Social casinos are, by and large, available and operating online in about 43 states in the USA. Michigan, Idaho, Montana, Nevada, Washington, Wyoming, and Kentucky are the states that are excluded by most sweepstakes casinos. These states are in the restricted list or excluded territories (a term used by social casinos).
Sweepstakes advertising and promotions are governed by federal statutes, such as the FTC Act, which regulates fraudulent advertising and competition. Promotional programs are regulated by the Children’s Online Privacy Protection Act, Direct Mail Prevention and Enforcement Act, CAN-SPAM Act, and the Telemarketing and Consumer Fraud and Abuse Prevention Act. Then there are state laws regulating promotional sweepstakes.
? What are Internet Sweepstakes Cafes?
Internet sweepstakes cafes refer to physical internet cafes in storefronts, gas stations and convenience stores in more than a dozen US states, including Texas, North Carolina, California, and Florida. These cafes are geared around the state sweepstakes laws and skirt the state antigambling laws and gambling licensing restrictions.
According to an estimate, they earn more than $10 billion a year with unlicensed games that look like traditional slots and poker machines. Such cafes usually sell a product purportedly- such as internet time or phone minutes- that is actually not needed by the customer. The buyer receives a supposed bonus of “entries” in the internet sweepstake.
These cafes are storefront operations that provide slot-machine-like gambling, including fish table games, through sweepstake tickets or tokens meant for use on customized tablets, video lottery machines, and personal computers. These cafes sell games that involve prizes, consideration, and chance, the usual elements of gambling. This is a very unregulated market which has prospered in the US due to slow progress of legal online casinos and betting.
Michigan has strict rule against payment for internet to get sweeps entries. The Michigan Penal Code broadly prohibits gambling operations with the elements of consideration, prize and chance.
The term sweepstakes cafes does not refer to sweepstakes casinos on the internet which offer gold coins and redeemable sweeps coins for all kinds of casino type games.
