The Party Is Over
A California sweepstakes prohibition bill has landed, as the pressure on the sweepstakes sector continues to increase.
California has a sweepstakes bill. Previewing today’s online casino hearing in Massachusetts. A look at Phase 2 of the AGA’s new RG platform. Another sports betting lawsuit.
The Bulletin Board
THE LEDE: AGA launches Play Smart from the Start website.
ROUNDUP: DraftKings PAC; RI passes smoking ban; MGC regulatory approval change; Quote of the Week.
NEWS: Massachusetts online casino hearing scheduled for today.
VIEWS: PHAI sues Caesars over “misleading” promotion.
AROUND the WATERCOOLER: California has a sweepstakes prohibition bill.
STRAY THOUGHTS: Off next week.
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The Lede: AGA’s Play Smart from the Start Enters Phase 2
The American Gaming Association (AGA) announced a new responsible gambling (RG) messaging platform, dubbed "Play Smart from the Start," in April. This weekend, the AGA entered Phase 2 of the project, launching a consumer hub: playsmartfromthestart.org.
The new website builds on the three foundational elements that underpin the Play Smart from the Start campaign.
Kudos to the American Gaming Association (AGA) for strengthening its commitment to responsible gaming… Play Smart from the Start shifts away from the current (primarily negative) messaging.
“When it comes to promoting responsible gaming, positive messaging trumps negative warnings,” AGA President and CEO Bill Miller said. “Our research shows consumers are motivated by pursuing positive outcomes – fun, enjoyable entertainment – than by avoiding negative consequences.”
And once again, I have to hand it to the AGA, you don’t often see this type of honesty and transparency:
One aspect I think holds the most promise is the Smart Plan checklist.
The questionnaire could be used at signup (fill out the Smart Plan Questionnaire and receive a free $10 bet. Players could then be asked to retake it in three or six months (with another carrot offered) and compare their answers.
Of course, that will require a lot of operator buy-in.
Roundup: DraftKings PAC; RI Smoking Ban; MGC Regulatory Changes; Quote of the Week
A little more on DraftKings’ new PAC [Politico]: Last week, I made a quick note of the news that DraftKings was starting a political action committee (PAC), but felt it deserved a slightly larger entry, including some of the context. Namely, that plenty of other gambling operators have a PAC. Per Politico, “Fantasy sports company PrizePicks started a PAC in 2023, and prominent casinos like MGM Resorts and Caesars Entertainment, as well as the American Gaming Association — which DraftKings belongs to — also have their own federal PACs.” And for some of the reasons why: “We have established this PAC to support state and federal candidates and organizations who have shown an interest in issues affecting our business,” a company spokesperson told The Hill.
Rhode Island legislature passes casino smoking bill [Providence Journal]: Victory at last! The Rhode Island legislature passed a casino smoking ban on the final day of the legislative session. S 188 prohibits smoking inside Bally’s Corp.’s Lincoln and Tiverton casinos, effective Jan. 1, 2027 — though there is a carveout for smoking bars located within the buildings, specifically the Plume & Proof Cigar Bar enclosed inside Bally’s Lincoln facility. You can read my recent feature column on efforts to end smoking in casinos here.
MGC changes approval of “non-standard” events [Sports Betting Dime]: At a meeting last week, the Massachusetts Gaming Commission (MGC) unanimously voted to require licensed sportsbooks to notify the state’s sports wagering division if they want to accept bets on any non-standard events moving forward. The regulatory change stems from the 2024 Jake Paul vs. Mike Tyson fight, which, despite its certification, didn’t feel like a legitimate sporting event to many observers. The MGC is looking to address concerns about the integrity and public perception of such non-standard events, without creating new onerous rules.
Quote of the Week: “When the future of in-person gaming is threatened, we don’t just lose entertainment venues — we lose jobs, tax revenue, local investment, and critical economic anchors.” Mark Stewart, EVP and General Counsel of The Cordish Companies
You can listen to my recent talk with Mark Stewart here:
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News: A Little iCasino Momentum in Massachusetts
The Massachusetts Joint Committee on Consumer Protection and Professional Licensure will discuss two online casino bills, HB 332 and SB 235, today. The bills are very similar, but not identical — SB 235 is more detailed in terms of policy and tax revenue distribution, as well as research on the social and economic effects of internet gaming.
Here are the nuts and bolts:
Licensing Eligibility: Category 1 licenses are available to existing casino licensees (currently, there are three casinos in the state), and up to four Category 2 licenses (untethered) are available to qualified gaming entities operating in three or more US jurisdictions. Category 1 licensees are permitted to operate two internet gaming platforms, whereas Category 2 licensees are limited to one.
Licensing Fee and Tax Rate: The initial licensing fee for an operator license (Category 1 or Category 2) is $5,000,000 for five years, with a $5,000,000 renewal fee every 5 years. The tax rate is set at 20%.
Advertising: The bill prohibits advertising that targets individuals under 21, deceptive marketing practices, and the display of unsolicited pop-up ads to individuals who have self-excluded.
Responsible Gaming: Operators must implement responsible gaming programs, including employee training, problem gaming assessments, and self-exclusion options.
Interstate Compacting: The commission may enter reciprocal agreements with other jurisdictions to allow multijurisdictional internet gaming (online poker), and live dealer games can be simulcast from any location, not necessarily within Massachusetts.
Massachusetts has historically adopted a cautious approach to gambling expansion, and the proposed legalization of online casinos is being discussed at a time when online casino bills have run into legislative roadblocks across the country — active efforts are still afoot in Maine and Ohio.
Massachusetts also presents a challenging environment for the following reasons:
The state legalized online lottery sales in 2024, with a planned launch in 2026, marking a significant expansion of its gambling offerings. The iLottery launch is a priority, and as we’ve seen in other states (especially states with online instant win lottery tickets that resemble slot machines), the lottery isn’t a fan of competition.
Despite its success, the legalization of sports betting has led to significant criticisms and regulatory scrutiny over responsible gambling, addiction, and operator practices.
The Mashpee Wampanoag Tribe’s efforts to build the First Light Resort & Casino in Taunton have been ongoing for over a decade, marked by legal, financial, and political challenges. A welcome center with a smattering of slot machines is up and running, but the tribe has grander plans, and won’t be happy if it is at a competitive disadvantage in the online realm.
News: PHAI Sues Caesars Over "Predatory" $2,500 Deposit Promotion
The Public Health Advocacy Institute (PHAI) has filed a lawsuit against Caesars that claims the company’s online casino bonus is “dangerous, misleading, and illegal.” The lawsuit was filed in Philadelphia, Pennsylvania: Brubaker vs Chester Downs and Marina, LLC et al. (Case ID: 250602325).
According to the PHAI press release, the “promotion suggests a $2,500 deposit match but requires $375,000 in bets in the first week before any payout… The public is not told that the promotion is designed to snare new customers in a ‘wild chase of action,’ where the bonus is unattainable and therefore impossible to win.”
The press release goes on to say:
“Assume a person is playing Blackjack at $10.00 per hand at the nonstop pace of two hands per minute. This amounts to $1,200 of gambling action per hour. If the person continued playing Blackjack nonstop at $10 per hand, it would take 312.5 hours to meet the promotion’s $375,000 wagering requirement. Since the promotion is capped at 7 days, that person would have to continue gambling nonstop for 44 hours each day to fulfill the wagering requirement—in other words, an impossible amount unless users were to dramatically increase the stakes of each hand.”
This is the third lawsuit filed by PHAI, and is one of several suits taking aim at deposit bonuses.
In December 2023, PHAI and its Center for Public Health Litigation filed a class-action lawsuit against DraftKings in Massachusetts. In August 2024, a judge in Massachusetts denied DraftKings' motion to dismiss, allowing the litigation to move forward.
In October 2024, PHAI filed a lawsuit against the Massachusetts Gaming Commission, “asking the court to compel the MGC to adhere to state law and turn over data that casinos compile to track player behavior under Section 97 of the Expanded Gaming Act.” As STTP previously reported, Section 97 reads in part:
“Notwithstanding any general or special law or rule or regulation to the contrary, a gaming establishment shall supply the Massachusetts gaming commission with customer tracking data collected or generated by loyalty programs, player tracking software, player card systems, online gambling transactions or any other information system.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
The bill that the sweepstakes industry most feared has been introduced, as California has joined the anti-sweepstakes party, capping off what has been a rough week for the sector, following legislation passed in New York and Connecticut, and cease-and-desist orders issued in Mississippi and Louisiana.
The California bill was not a surprise, as Victor Rocha let the cat out of the bag during the Indian Gaming Association’s New Normal webinar series on Wednesday, followed by several social media posts that intimated the bill would be dropping by the end of the week:
The California bill has the backing of the California Nations Indian Gaming Association (CNIGA), per Light & Wonder’s Howard Glaser, who wrote on LinkedIn that the legislation makes it unlawful to facilitate or promote the operation of illegal online sweepstakes casinos by any “person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate.”
The bill will be the topic of discussion on this week’s New Normal Webinar series.
After chalking up several legislative wins, the momentum has shifted to the anti-sweepstakes side. That doesn’t bode well for sweepstakes operators moving forward. This is the first year of legislative efforts, and while bills were defeated in several states, several other states, Montana, Nevada, and Connecticut passed bills, with New York’s bill a Gov. Kathy Hochul signature away from becoming law.
Further, 16 states have issued cease-and-desist orders to sweepstakes operators — the C&D actions date back to October 2023, when Michigan sent the first cease-and-desist letter to Prediction Strike.
Based on LinkedIn posts from those in the know, it appears that legislation or cease-and-desist orders may be forthcoming in Texas and/or Florida.
As Light & Wonder’s F Steven DiMasi put it:
“I think we are not far from having approximately 20 US states on the excluded territories list for some domestic sweep operators. That translates into 35.5% of the US population will be on an excluded territories list once CA and NY are added. Add in FL and TX, and that gets you to 50% of the US population.”
Stray Thoughts
Just a heads up: Straight to the Point will be on its summer break from June 30 through July 6… So expect all hell to break loose that week!