It’s just the middle of the week, but the past days haven’t been going well at all for sweepstakes companies. On Tuesday, both Louisiana and Mississippi regulators from big retail casino states released a storm of cease-and-desist notices against many sites they said were illegal.

Targets ranged from offshore sportsbook platforms and iGaming pages to sweepstakes operators, according to officials, with Louisiana handing out 40 orders and Mississippi giving out 10. While Louisiana addressed its cease-and-desist straight to VGW, Mississippi pointed it at Chumba, as revealed by regulatory announcements. Investors have also criticised the firm for its shrinking financial transparency, alongside all the legal attention.

Earlier this month, VGW’s founder Laurence Escalante told everyone bluntly that people who do not trust his leadership should just sell their shares.

Please exit the bayou

The Louisiana Gaming Control Board’s order came soon after lawmakers had already passed a bill banning sweepstakes as a whole. Yet Governor Jeff Landry vetoed that ban on June 13, arguing that state regulators themselves have enough power to control the industry.

The move was immediately welcomed by the Social and Promotional Games Association, a group speaking up for some sweepstakes operators but not VGW itself. “The veto by Governor Landry stands as strong proof that not every online game counts as gambling and new ideas should not face strict bans,” the SPGA said at the time.

“This bill mixed up key legal points and could have punished honest businesses sticking to accepted sweepstakes laws and running free-to-play options,” the group added. Separately, another group including VGW called the Social Gaming Leadership Alliance, responded, saying the decision gives everyone a real chance to find fair rules for allowing Louisiana residents to play social games online and perhaps introduce a clear licensing plan.

But regulators took little time to switch the mood, seeing things their own way.
The Louisiana Gaming Control Board described their crackdown as a “strong show of enforcement” in an official release. Chairman Chris Herbert explained it as sending a “clear message,” saying Louisiana would never accept unlawful companies that risk the safety of citizens and damage the honesty of the gaming sector.

Mississippi: No online gaming here

Mississippi’s Gaming Commission not only go after sweepstakes, but in their official message, they made clear that no online gambling can be allowed within the state, including sweeps. “Even when a game says it is free, if a player pays in some way and can win something valuable, plus there is an element of chance, this is gambling under Mississippi law,” read the commission’s statement.

A total ban on sweepstakes was proposed through Senate Bill 251, which passed the state senate last February. However, after the House tried to include rules for mobile sports betting, the Senate refused the combined bill. At present, only land-based casino games and sports betting are legal for players in the state.

Executive Director Jay McDaniel made it clear in a statement that the MGC will chase after both home-grown and foreign unlawful operators, providing criminal evidence to state and federal authorities and requesting prosecution. He also pointed out that companies called out this week are tricking Mississippi people by pretending to be legal but actually fail to pay taxes or give any real value back to the state.

New York State of Mind?

On the same day, New York lawmakers advanced their own new ban on sweepstakes games. Senate Bill S5935A went through both houses in under a week, passing the assembly with 141 votes in favour and zero against. If Governor Kathy Hochul signs the bill, New York will join Montana, Connecticut, and Nevada as states banning sweepstakes in 2024.

Back in March, New York authorities sent out 26 cease-and-desist warnings to sweep sites, coming from Attorney General Letitia James. VGW’s main platforms, Chumba, LuckyLand, and Global Poker, were named in these notices. In late May, VGW announced it was shutting down its sweepstakes business in New York.

New York State Gaming Commission Chairman Brian O’Dwyer called such sweepstakes products dishonest, unsafe, and not legal. He stated he has always pushed hard for a crackdown on these sites and is glad that Attorney General James took big legal steps to fight illegal gambling. He finally encouraged people who are old enough and want to gamble to choose legal operators instead of unlicensed ones.