Despite early progress, a proposed bill to ban Maryland sweepstakes casinos failed to pass before the end of the legislative session.
Senate Bill 860 proposed by Sen. Paul Corderman would have prohibited dual-currency platforms that offer contests or promotions to win cash or other prizes through mobile or online.
In addition to criminalizing sweepstakes operators, the bill would also have penalized their suppliers, payment processors, geolocation partners, and other affiliated parties.
The bill was approved in the Senate last month and passed to the House, where it failed to progress to a vote.
Another bill proposing legal online casino gaming also failed to progress before the end of the session.
Regulators struggle with sweepstakes casinos
Several states have tried and failed to pass legislation targeting sweepstakes casinos. A bill in Mississippi also failed last week. Other states, including Illinois and Louisiana, have moved forward with proposals in the last week, but face challenges to get legislation passed.
Idaho, Washington, and Michigan have managed to pass bills with stricter rules around sweepstakes casinos. As a result of stricter laws, in Washington last year, a lawsuit managed to claim $25 million in compensation from High 5 Games over complaints of violating gambling laws.
Similar lawsuits have been filed in California and Illinois over the last week against Stake, one of the most prominent sweepstakes casino sites.
Maryland sweepstakes and legal gambling
Maryland has allowed legal sports betting since a vote in 2020. Online sports betting was legalized in 2022 and the industry is thriving. Last year there was a 20% increase in wagers, up from $3.5 billion to $4.2 billion. This brought in over $60 million in taxes to the states.
In a bid to protect the legal sports betting industry, Maryland was one of six states to issue cease-and-desist letters to Crypto.com, Kalshi, and Robinhood over their sports event prediction markets last week.
Casinos are also legal, and there are six in the state. Total revenue was over $1.5 billion last year. However, online casinos remain illegal. With no legal online casinos, gamblers turn to other methods, such as sweepstakes casinos and crypto casinos.
Approximately 55 million Americans participate in sweepstakes casinos annually, particularly in states where online casinos are illegal. The industry continues to grow and is predicted to reach over $8 billion in revenue this year.
States with no legislation are, therefore, missing out on a tax windfall. Through legislation and stricter regulations, states such as New York have managed to drive out some operators and protect legal casinos.
Maryland sweepstakes can continue for the time being, but new legislation will surely be proposed in the near future.
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