Maryland Orders Sweepstakes Operator VGW to Cease-and-Desist

The Maryland Lottery and Gaming Control Agency has slammed sweepstakes casino giant Virtual Gaming Worlds (VGW) with a cease-and-desist letter. The regulator argued that the operator’s products constituted illegal gaming and that it must pull out from the market.

This regulatory action aligns with a broader opposition to the sweepstakes format across America.

Maryland Cracks Down on Sweepstakes

Maryland, where a proposed ban on social casinos is steadily gaining traction, has intensified its efforts against sweepstakes. On March 12, the Maryland Lottery and Gaming Control Agency sent a formal cease-and-desist letter to VGW, asking it to halt its unlicensed gaming operation in the state.

For context, sweepstakes are a type of dual-currency gaming where players wager a digital currency for a chance to win money or money equivalents. While players can acquire some of this digital currency for free, they can also buy it if they wish to play more.

Since players can technically play and win for free, sweepstakes proponents have argued that this type of product does not constitute gambling. Opponents, on the other hand, have highlighted the similarities with online casinos.

Until now, sweepstakes have mostly existed in the US grey market. However, multiple jurisdictions have recently taken action to outlaw them.

VGW Risks a Ban in Maryland

In its letter, the Maryland agency equated VGW’s operations to gambling. For context, the operator runs several high-profile sweepstakes casinos, including Chumba Casino, LuckyLand Slots, and Global Poker.

The Marland commission furthermore issued a reminder that the only permitted forms of online gaming include online sports betting and mobile and online fantasy contests. Online casino gaming, on the other hand, remains prohibited.

As a result, VGW was deemed to be in severe violation of the state’s gaming laws. The operator was given until March 27 to respond to the letter. In addition to that, it was required to stop its operations within 10 days of receiving the letter.

If VGW fails to comply with the agency’s requirements, it risks severe consequences. Among other things, the operator might be permanently banned in the state, meaning that it would never be able to receive any gaming license in Maryland.

Sweepstakes Under Fire

As mentioned, the Maryland Lottery and Gaming Control Agency’s regulatory action against VGW is by no means unique. Other US jurisdictions have also slammed major sweepstakes operators with cease-and-desist letters, asking them to stop offering gaming to local players.

In the meantime, lawmakers in multiple states have proposed measures to ban sweepstakes operators for good. Commercial operators, tribal entities, and regulatory bodies have been equally supportive of such proposals, saying that unregulated sweepstakes undermine the legal industry.

Sweepstakes operators, on the other hand, have expressed willingness to be regulated, saying that they wouldn’t mind paying taxes as long as they can offer their products legally.