VGW Exits Connecticut Amid Regulatory Pressure
VGW Holdings, a sweepstakes gaming operator, has ceased operations in Connecticut and withdrawn from the jurisdiction following a cease and desist order from the state’s consumer protection group.
VGW has included Connecticut in its list of restricted states where its services are no longer available.
LISTEN TO THIS ARTICLE:In February, the Connecticut Department of Consumer Protection issued a letter to VGW Holdings, classifying its products as unlicensed gambling. Consequently, the company was directed to cease offering its services to Connecticut residents and withdraw from the state's gaming market.
The group further warned VGW Holdings that failure to comply with the cease and desist order may result in further regulatory action, which could include civil and criminal penalties in accordance with applicable state laws.
Alongside the cease and desist order, the CT DCP also condemned VGW’s product promotion in the state as unfair and misleading.
The sweepstakes operator’s exit in the Constitution State was confirmed after Daniel Wallach, Founder of Wallach Legal, brought to light the updates to the terms and conditions of VGW’s Chumba Casino and Luckyland Slots.
The brand included Connecticut in its list of restricted states where its services are no longer available. The list features other states like Idaho, Michigan, Washington, and Montana.
AGA Seeks Oversight of Sweepstakes Gaming
For a long time, sweepstakes operators have claimed that their offerings do not qualify as gambling, sidestepping them from extensive regulatory oversight. However, in recent months, regulatory attention in the sweepstakes sector has increased significantly.
In August, the American Gaming Association (AGA) called for a thorough review of the legal status of sweepstakes gaming operators, citing concerns over their similarity to traditional betting operations.
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According to the AGA, the absence of regulatory oversight in the sweepstakes industry poses significant risks to consumers and undermines the integrity and economic benefits of the legal gaming market derived from investments and tax revenues. As a result, they urge the government and regulatory authorities to curb the expansion of the sweepstakes market.
In January, VGW Holdings received a similar cease and desist order in Michigan, which led to its exit from the state. Although it received the same directive in Delaware, it continues to operate in the jurisdiction.
SPGA Formation
In response to the AGA’s statements and increasing regulatory challenges, eleven social gaming casinos and sweepstakes came together to form the SPGA, the Social and Promotional Gaming Association. The new association aims to advocate for the responsible operation of social and sweepstakes casinos by educating stakeholders and promoting best practices within the industry.
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