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Louisiana Senator Adam Bass has filed a bill that narrows the definition of a legal sweepstakes to exclude social casinos offering prizes through a dual-currency business model. At the same time, the bill would place new restrictions on gambling operators and suppliers, potentially stripping them of their licenses if they’re found to be operating in certain gray and black markets.
A literal reading of the bill’s draft language suggests it could have a significant adverse effect on the operations of many companies currently serving Louisianans. However, it may be amended for clarity as it works its way through the legislature.
One of the bill’s intended ramifications is the disruption of players’ access to so-called sweeps casinos. It could also result in the revocation of licenses for gambling vendors serving licensed operators in Louisiana based on their activities abroad.
The state of gambling in Louisiana is in flux at present. The bill’s introduction follows an important state Supreme Court ruling affecting a different type of gambling, namely the historical horse racing machines found at racetracks in the state.
SB181 aims to tighten Louisiana gambling laws
Bass filed SB181 on April 4 and the bill has been referred to the Louisiana Senate’s Judiciary Committee. The bill alters existing state law in ways that seem directed at sweepstakes-based online casino games.
SB181, if enacted, would add “any games, contest, or promotion that is available on the internet or accessible on a mobile phone, computer terminal, or similar access device that utilizes a dual currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, or any chance to win any prize or award or cash or cash equivalents, and simulates any form of gambling shall constitute illegal gambling by computer and shall not be considered a legal sweepstakes” to the Louisiana code.
The language targeting the dual-currency system and simulation of casino games won’t go unnoticed by sweeps casino operators, since it’s a reference to their business model.
Meanwhile, another part of the bill might be worrisome for slots manufacturers serving Louisiana retail casinos. It seeks to hold them able for revenue coming from markets Louisiana deems illegal, even if they aren’t operating in those markets directly.
Vendors could face several new requirements
SB181 also enshrines new language making it “unlawful for any applicant, licensed or permitted entity, geolocation provider, gaming manufacturer, gaming supplier, platform provider, promoter, or media to provide for the operation, conduct, or promotion of illegal gambling by computer, including illegal online sweepstakes games.” There is language addressing qualifications for gaming manufacturers and gaming suppliers, too.
The bill establishes a five-year period leading up to a license application during which the applicant becomes ineligible for licensure if the company is d with a “state sponsor of terrorism by the United States Department of State” or “determined by the [Louisiana Gaming] board as knowingly ing or fostering illegal gambling.”
Additionally, the Louisiana Gaming Board is required to revoke the license of any manufacturer or supplier who engages in such activity under SB181. It’s possible that Bass’ bill is a response to a 2021 complaint from an unknown US-based competitor accusing Evolution Gaming of knowingly allowing its games to be played in countries like Iran and Syria.
Although the bill’s ambitions are clear, the language might see some alterations if it proceeds in Baton Rouge.
Bass’ bill may need clarifying amendments
Some language in the bill’s current draft may spark alarm among casino venders. For instance, the section of the bill that lists out the causes for stripping a vendor of its license includes operating in “a country or territory which prohibits land-based gaming, online gaming, or both.”
Taken literally, that would appear to mean that it would be a disqualifying offence to offer retail slots legally in a country that prohibits online gambling, or vice versa.
If the bill were to in this form, that could be a problem for companies who serve licensed online casino operators in Sweden. The government of that country has just online casinos legal.
However, ironing out ambiguities and unintended consequences is what legislative hearings are for. Bass’ actual intent should become clear as the bill makes its way through the legislature.
Meanwhile, another segment of the gambling industry in Louisiana failed to obtain its desired results in court.
Louisiana Supreme Court strikes down HHR-enabling law
On Thursday, the Louisiana Supreme Court upheld a lower court ruling that a 2021 law that authorized the operation of historical horse racing (HHR) violates the state’s constitution because the Louisiana Constitution requires voter approval on a parish-by-parish basis to expand the scope of legal gambling. The ruling has direct implications for operations at multiple venues in Louisiana, including Delta Downs and Evangeline Downs.
Companies like Churchills Downs, which operates Fair Grounds Race Course, could push for referendums in the affected parishes. Those petitions will go through the state government first, like Bass’ bill to restrict sweepstakes.
