Maryland Takes Another Step to Ban Online Sweepstakes Casinos

• The Senate Budget and Taxation Committee unanimously approved a bill banning online sweepstakes games and casinos
• The bill bans online sweepstakes gaming in the state and sets fines for those who do not abide by the law
• Fines and imprisonment will be imposed for those who do not obey the prohibition

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Maryland lawmakers are looking to take a stand against what they feel is illegal gambling in their state.

The Maryland Senate Budget and Taxation Committee last week unanimously approved SB 860, a bill banning online sweepstakes gaming and casinos, by a 13-0 vote.

“This speaks for itself. There is no statute to enforce this right now,” Sen. Paul D. Corderman (R-2), author of the bill noted during the hearing.

Companion Bill in House

Delegate Eric Ebersole (D-44A) introduced HB 1140 in the House as a companion bill to Corderman’s legislation. It has a hearing today at 1 p.m. in the House Ways and Means Committee.

Both pieces of legislation seek to ban online sweepstakes gaming, while also allowing the State Lottery and Gaming Control Commission to deny any individual or operator a gaming license or to continue to operate in the state if they accept revenue that is directly or indirectly connected to sweepstakes gaming.

A person who violates the new law will be subjected to a fine between $10,000 and $100,000, while also facing up to three years imprisonment.

The bill defines an online sweepstakes game as one that “utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, or any chance to win any prize or award or cash or cash equivalents.”

Basically, this prohibits any game in the state that allows users to purchase “sweepstakes coins” and use them on casino-style games or sports bets, in turn exchanging them for cash prizes if they win.

States Examining Online Sweepstakes

Maryland is not the only state to take a closer look at online sweepstakes offering casino-style games and sports betting. Connecticut, Mississippi, and New York are all examining potential bans as well.

In Connecticut, a group of lawmakers have also banded together to prohibit sweepstakes gaming in the Constitution State.

The Connecticut General Law Committee introduced SB 1235, which prohibits unlicensed participation “in certain real or simulated online casino gaming or sports wagering.”

The bill also prohibits lottery ticket resales and ticket courier services.

Mississippi Sen. Joey Fillingane (R-41) recently introduced SB 2510, a bill to include online sweepstakes games and sweepstakes casinos on the state’s prohibited games list. Brick-and-mortar sweepstakes cafes are already prohibited in Mississippi.

The legislation will raise the potential penalty for sweepstakes operators from a misdemeanor to a felony, with each violation potentially resulting in a fine of no more than $100,000 or imprisonment for up to 10 years.

Operators could also face forfeiture to the state of “assets, rights, and privileges” in connection with the violation.

In New York, Sen. Joseph P. Addabbo Jr. said he will examine closing a loophole that allows online sweepstakes gaming to exist in the Empire State.

The Chair of the NYS Senate Racing, Gaming, and Wagering Committee discussed the issue during a recent podcast.

“Many sweepstakes’ operators are located offshore making enforcement limited or impossible, and our most vulnerable populations, youth and elderly, are most often targeted, which is why I want to act to address this existing loophole,” Addabbo said.

Sweepstakes gaming that allows users to purchase “sweepstakes coins” and use them to win more money is “simple gambling and should be safely regulated,” he said.