Louisiana’s Legislative Battle Against Sweepstakes Social Casinos

• Louisiana becomes the latest state to target the sweepstake social casinos model
• An industry trade body warns of the potential unintended consequences of such legislation
• The newly proposed bill has been criticized as ‘economically and culturally tone-deaf’

Louisiana has recently joined a growing number of states that are attempting to challenge sweepstakes through legislative measures, labeling the activity as ‘illegal gambling.’ Although similar efforts to ban sweepstakes in states like Mississippi were unsuccessful, primarily due to the poorly integrated addition of sports betting rules, the opposition towards the sector persists.

Louisiana Bill Seeks to Address Loyalty Programs

Senator Adam Bass in Louisiana has introduced Senate Bill 181, which aims to formalize this stance by classifying the activity as a form of unregulated gambling that requires intervention. However, the Social and Promotional Games Association (SPGA) contends that this is a ‘reckless simplification’ of the issue.

Over the weekend, the SPGA released a statement cautioning Senator Bass about the potential consequences of passing this bill. They argued that its success could pose a threat to the state’s technology sector. The SPGA highlighted that for many years, companies such as fast-food chains and app developers have employed similar mechanics without any opposition.

The SPGA emphasized that the ‘no purchase necessary’ rule is a well-established precedent and business practice, arguing that imposing a prohibition under a new state law could lead to overreach and potentially harm more than just one industry.

Additionally, the association expressed concern that SB181 could lead to the criminalization of loyalty programs, creating chaos by potentially categorizing loyalty and rewards programs under the ‘sweepstake’ definition, thus rendering them illegal.

Tone-Deaf and Economically Challenging Proposal, Warns the SPGA

According to the association, SB181 is both culturally and economically tone-deaf. They pointed to evidence that a significant number of individuals have enjoyed sweepstake casinos for many years, and that the model has been widely accepted as legal across much of the country.

The passage of SB181 could deter venture capital investment, which might, in turn, impede the development of new technology emerging from the state, including vital technologies like artificial intelligence. The SPGA further argued that SB181 positions itself as unfriendly to business and innovation, as well as to consumers who have appreciated the sweepstakes social casino model.

From the association’s perspective, state legislators should oppose and halt what the SPGA has described as an ‘ill-conceived bill,’ calling for more expert input before enacting any changes to the legal framework.

In March, Arkansas also introduced a draft law seeking to prohibit sweepstakes operators by classifying them as illegal gambling.