Pennsylvania Targets Sweepstakes Casinos with Shutdown Orders
Pennsylvania is taking action against sweepstakes casinos operating within its jurisdiction, becoming the latest state to move toward eliminating these controversial platforms. The Pennsylvania Gaming Control Board (PGCB) disclosed during a recent Gaming Oversight Committee hearing that it has delivered 18 cease-and-desist letters to sweepstakes casino operators.
LISTEN TO THIS ARTICLE:These operators include both offshore entities and some based domestically, with a number conducting business directly in Pennsylvania. Despite their activity in the state, none of these operators possess an interactive gaming license issued by the PGCB.
Related: Florida Orders Offshore Betting Sites to Cease OperationsSweepstakes casinos typically present themselves as social casinos. They use a sweepstakes-based model where players can earn the chance to win prizes through play-money mechanics.
Because they do not offer traditional real-money gambling, these platforms often exist in a legal gray area, avoiding classification as gambling operations under federal law. Nevertheless, state authorities and legislators are increasingly scrutinizing these businesses, aiming to close what they perceive as a loophole that allows unlicensed operators to flourish.
Although the PGCB lacks the statutory authority to legally take action or impose penalties on these companies in the same way it would for licensed online casinos and sportsbooks, it has nonetheless taken steps to limit their presence. The 18 cease-and-desist letters issued thus far have all been honored by the recipients. Yet the growing popularity and proliferation of sweepstakes casinos present a persistent challenge as new brands continue to emerge.
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At the hearing, PGCB Chief Counsel Steve Cook emphasized a fundamental problem in the current legal framework governing gambling in Pennsylvania. He explained that while Chapter 13B of the Gaming Act includes language meant to prohibit unlicensed online gaming, these provisions are undermined by conflicting definitions elsewhere in the statute. The result is a regulatory environment that limits the PGCB's ability to take decisive enforcement actions against sweepstakes platforms.
Cook referred to a ruling by the Pennsylvania court in December 2023 that determined that the language of the Gaming Act does not extend the PGCB's authority to entities outside its licensing framework, even when those entities engage in activities that may be considered illegal gambling. This interpretation has significantly curtailed the PGCB's ability to act against unlicensed operators using the sweepstakes model. Cook expressed his view that the law's language is flawed and called for legislative amendments to strengthen regulatory authority.
As it stands, sweepstakes casinos remain unregulated in Pennsylvania, similar to skill games that have also become widespread in the state. Cook argued that these platforms meet the criteria for gambling and pose a threat to both consumers and the integrity of Pennsylvania's legal gambling industry.
He also noted that, unlike licensed operators, sweepstakes platforms aren't subject to fairness testing, responsible gambling requirements, or age verification protocols. This lack of oversight creates significant risks for players and undermines consumer protections established by regulated platforms.
Pitre reinforced the PGCB's commitment to safeguarding the integrity of the state's legal gambling industry. He stated that sweepstakes casinos, although often presented as legal alternatives, are considered by the board to be illegal forms of online gambling, and further intervention is expected.
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