Louisiana bill targeting social casinos sparks backlash from sweepstakes gaming operators

A new bill introduced in the Louisiana Senate aims to classify certain social casino games as illegal gambling, a move that has stirred up debate and drawn criticism from sweepstakes casino operators.

Republican State Senator Adam Bass unveiled Senate Bill 181 (SB181), proposing fines ranging from $10,000 to $100,000 for violations. The legislation targets not only game operators but also suppliers, marketing affiliates, and companies providing geolocation or platform services to sweepstakes-style gaming businesses.

The measure follows similar efforts in New York and Mississippi, as more states seek to tighten regulations on sweepstakes casinos, which operate in 48 states, though often under varying restrictions.

The Social and Promotional Games Association (SPGA), a trade group representing sweepstakes and social gaming companies, strongly opposes the bill. In a statement, the organization said SB181 could blur the line between legitimate promotions and illegal gambling activities.

It equates legitimate sweepstakes with illegal gambling, threatening businesses that have operated lawfully for years, the SPGA said, warning that the bill's broad language may also impact traditional promotional campaigns by major brands such as Marriott and Delta.

Social casinos often operate under a “dual-currency” sweepstakes gaming system, where users acquire virtual coins that can be used for casino-style games and later redeemed for cash or prizes. Critics argue these platforms operate in a legal gray area, offering gambling-like experiences without state oversight.  

Opponents also argue that sweepstakes gaming circumvents key regulatory safeguards, such as consumer protections, responsible gaming policies, and anti-money laundering measures. Since these operations are untaxed and unregulated, some contend they present unfair competition to legal, state-regulated offerings.  

Social casino operators challenge these arguments. Misclassifying these games could discourage investment in Louisiana's tech sector and harm the local economy, the SPGA said, adding that without consulting industry experts, the bill risks stifling innovation.

The bill arrives as Louisiana lawmakers weigh broader changes to the state's gaming laws. The Senate Judiciary B and Revenue and Fiscal Affairs Committee recently discussed legalizing online casinos, a move that supporters argue could recapture tax revenue lost to unregulated gambling platforms.

Louisiana has a long history of legalized gambling, particularly in New Orleans and Baton Rouge. While the state has traditionally taken a cautious approach to online gaming, the approval of fantasy sports betting in 2018 signaled a gradual shift in policy.

Still, concerns remain. Lawmakers continue to debate how best to balance economic opportunity with consumer protection as digital gambling options grow.