Indiana House committee passes bill to ban online sweepstakes casinos

An Indiana House committee recently advanced a bill that would ban online sweepstakes casinos in the state – albeit with a provision.

House Bill 1052 passed through the Public Policy Committee by a 10-0 vote, but an amendment added to the bill removed a provision that would criminalize those operations and instead proposed civil penalties. Regardless, it's yet another state that is looking to crack down on perceived illegal online casino platforms.

As sponsored by House Public Policy Committee chair Ethan Manning, HB 1052 would make any platform operating multi-currency sweepstakes offerings resembling casino games illegal in the state.

The proposal would officially prohibit such operations in the state, as the Indiana Gaming Commission (IGC) said that, as it stands, online sweepstakes casinos are not currently illegal in Indiana. As a result, IGC representatives indicated, the commission could not send out cease-and-desist letters like other states "in good faith, based on current law."

While Indiana joins a growing list of states targeting online sweepstakes casinos, several members on the House committee wondered if attempting to regulate them would make more sense than passing an outright prohibition.

Interestingly, while a proposed amendment of the bill to do just that fell short of approval, some members suggested legalizing real money online casino platforms as a way of banning sweeps operators.

Manning himself has said that Indiana residents visit online sweepstakes casinos because "that's what's available right now," adding that if iGaming was legal in the state, "there wouldn't be much market for the sweeps casinos."

The Social Gaming Leadership Alliance (SGLA), representing several of the top online sweepstakes casinos, has long lobbied for states to regulate their vertical rather than outright banning it. The group doubled down on that sentiment following the bill's committee passage, arguing that sweeps casinos could generate over $20 million in annual revenue for the state.

The SGLA also emphasized that, with regulation, online sweepstakes casinos could enforce age verification, data privacy and responsible gaming protections – many of the same standards in place for licensed casino apps to allow users to play casino games online.

Sean Ostrow, managing director for the SGLA, said that "sensible regulation is the pragmatic pathway forward" for Indiana in regard to online sweepstakes casinos.

Conversely, however, the IGC has continued to urge state lawmakers to ban sweeps platforms as those operators are "essentially offering a form of gambling with no regulation, licensing, or taxation." 

Grant Lucas