Indiana governor Mike Braun has signed a new state law stopping any company that runs an online casino that uses “sweepstakes” style to run their operations from operating in the state of Indiana.
This new law, House Bill 1052, will become effective on July 1, and was designed specifically to target internet-based competitions that mimic traditional casino gambling by using promotional sweepstakes mechanics associated with online games, competition, or marketing campaigns, which use devices like cell phones and computers or other types of digital equipment.
This law was passed by Indiana’s General Assembly earlier this year; this will now allow regulators to take enforcement action against online operators who provide these types of games on the internet.
To be clear, the new law states that any company that conducts sweepstakes from their internet website and uses dual currencies or multi currencies to allow customers to redeem virtual balances (such as from game credits) for money, cash equivalent, or chances to win money through the operation of those games is a company that will be prosecuted under this new law.
Simulated Gambling Activities and Enforcement Measures
As part of these laws, several types of simulated gambling activities will also fall under the parameters of this new law, including but not limited to: games of lottery; games that operate under the slot machine category; games of video poker; traditional table games; games of bingo; and any types of sports wagering that use any type of simulated format to imitate a professional sporting event.
The Indiana Gaming Commission has the power to impose civil penalties. Civil penalties can be imposed in an amount up to $100,000 depending on the situation. These penalties may apply to both operators and individuals who intentionally provide a gaming product that is classified as a sweepstakes on the internet from Indiana, and to provide gaming products to individuals who are utilizing the internet to play sweepstakes from Indiana.
Industry Response and Legislative Changes
The industry group representing the sweepstakes business, called the Social Gaming Leadership Alliance (SGLA), raised significant concerns regarding the outright ban on sweepstakes gaming that has been proposed by the Indiana Gaming Commission. They support regulating the sweepstakes business instead of an outright prohibition.
While the SGLA supported regulation in place of prohibition, their efforts to change the final outcome of the legislation were unsuccessful.
The proposed original legislation, HB 1052, primarily focused on defining sweepstakes platforms using dual currency and multi-currency payment systems to conduct simulated casino-style games. In its final form, HB 1052 includes language that defines both dual currency and multi-currency payment systems and describes a much broader range of gambling products than had initially been included in the bill.
In addition, the bill as passed made various modifications to the definitions and exclusions regarding sweepstakes gaming, which were not completely addressed through prior versions of the legislation.
Only one clarification was made relative to the definition of a sweepstakes and whether it includes promotional programs conducted under the auspices of the Indiana State Lottery. The classification of poker tournaments has also been changed; previously they had been under a different classification system than traditional forms of gambling and are now classified as skill-based competitions in which players play against each other.
There were additional changes to the laws to bring these new laws into line with the existing gambling regulations in Indiana governed by the Indiana Gaming Commission, which resulted in an overall framework for the state to enforce its gaming laws, with the incorporation of the sweepstakes provisions as part of Indiana’s existing gaming enforcement framework.
