Maryland Bill Seeks to Ban Sweepstakes Casinos, Penalize Operators and Suppliers

February 5, 2025 – A new legislative proposal in Maryland aims to outlaw online sweepstakes casinos and impose strict penalties on operators, suppliers, and affiliates involved in the industry. Senate Bill 860 (SB 860), introduced by Senator Paul Corderman, is currently under review in the Senate Budget and Taxation Committee following its introduction on January 28.

Defining Sweepstakes Casinos Under SB 860

The bill explicitly defines sweepstakes casinos as online platforms that:

• Are accessible via the internet or mobile devices.
• Utilize a dual-currency system where players can exchange virtual currency for prizes, cash, or cash equivalents.
• Simulate casino-style games (including slots, video poker, blackjack, roulette, and craps), lottery games (such as draw games, instant games, keno, and bingo), or sports betting.

The proposed legislation does not apply to online casino-style games that do not offer cash or cash-equivalent prizes.

Penalties for Operators and Suppliers

If passed, SB 860 would make it a criminal offense to operate an online sweepstakes gaming site in Maryland. Additionally, suppliers providing services to such sites would face severe penalties, including:

• License revocation for payment processors, geolocation providers, affiliates, and platform suppliers that support sweepstakes casinos.
• A misdemeanor charge, with potential fines ranging from $10,000 to $100,000.
• A maximum prison sentence of three years.

The bill represents one of the most aggressive legislative efforts against sweepstakes casinos, extending liability beyond operators to include key business partners facilitating these platforms.

Industry Reaction and Legal Precedents

Major gaming suppliers such as Light & Wonder have publicly advocated for stronger regulations on sweepstakes casinos. Meanwhile, companies like Worldpay, which processes payments for leading sweepstakes operator Virtual Gaming Worlds (VGW), have faced legal scrutiny. Both firms were named in a Florida federal court lawsuit alleging that sweepstakes gaming sites violate gambling laws.

Similar legislative efforts in New Jersey and Mississippi have sought to regulate or prohibit sweepstakes casinos but have typically stopped short of imposing penalties on suppliers and affiliates. Maryland’s SB 860, however, directly targets third-party service providers, signaling a broader crackdown on the industry.

Pushback from the Industry

The Social and Promotional Games Association has publicly opposed the measure, arguing that the bill overreaches by criminalizing common marketing strategies.

“This misguided legislation threatens to criminalize a marketing tool utilized daily by thousands of American businesses to promote everything from coffee to cheeseburgers to cryptocurrency,” the association stated.

The group also criticized the bill as an example of anti-competitive special interests influencing legislative policy, warning that it could stifle innovation, harm small businesses, and restrict consumer access to social gaming platforms.

What’s Next?

SB 860 remains in committee as lawmakers debate its implications. If enacted, the bill could fundamentally reshape Maryland’s gaming industry by eliminating online sweepstakes casinos and holding suppliers accountable for their involvement. The decision will likely have a ripple effect, influencing similar regulatory efforts across other states.

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