Sweepstakes Sportsbooks Currently Unregulated
The driving reason behind the new AGA policy is to end a legal loophole in the way sweepstakes sportsbooks currently operate. The group argues that this allows the operators to work without regulations or oversight. That means they do not have requirements to offer fair gaming, meaning bettors could be at risk.
These controversial sportsbooks can operate in 46 states because they do not take real money bets. Instead, players buy packs of coins to place wagers on events. The coins cannot be withdrawn for cash but can be redeemed for prizes.
This has made sweepstakes sportsbooks incredibly popular, especially in states where online sports betting is not legal.
AGA Also Protecting Regulated Sportsbooks
While the AGA’s new policy is centered around responsible gaming and protecting customers, that is likely not their only goal.
The group often works on behalf of regulated sportsbooks, which have been losing business to sweepstakes casinos. Some of those operators have publicly called for an end to the unregulated industry, influencing the AGA to take action.
Crackdown On Unregulated Sportsbooks Continues
While no legal action has been taken against sweepstakes sportsbooks yet, we expect to see that soon. State regulators across the country have begun to crack down on offshore sportsbooks, which have also existed in a legal grey area that is rapidly shrinking.
Bovada, one of the largest operators in the world, has been the most popular target for regulators. They have received many cease-and-desist letters to stop operating in markets and have complied with each.
With the AGA officially taking a stance on the controversial industry, expect regulators to begin a similar crackdown soon.
