Maryland Cracks Down on VGW, Requires Legal Justification for Operations
The Maryland Lottery and Gaming Control Agency is tightening its regulatory grip, especially targeting Virtual Gaming Worlds (VGW), a prominent Australian operator behind popular sweepstakes casino sites, Chumba Casino and Luckyland Slots. On March 12th, Maryland’s gaming regulator issued a stern notice, emphasizing that VGW is offering online gaming without proper legal authorization.
Michael Eaton, Managing Director of the agency, highlighted explicitly in his communication that Maryland law permits only mobile/online sports wagering and fantasy competitions. Explicitly prohibited are online casino gaming activities, known as iGaming, unless the operator holds the necessary state-issued licenses or registrations. Eaton underscored, "There is no record of VGW being issued a sports wagering license, a casino gaming license, or registration as a fantasy competition operator."
Cease and Desist: Maryland's Ultimatum to VGW
The letter from Maryland Lottery and Gaming Control Agency compels VGW to clarify their operational status by March 27, 2025. Should VGW continue conducting unauthorized gaming activities, the state demands detailed descriptions of their offerings, links to their games, and, notably, legal analyses justifying their operations under Maryland law.
Moreover, the agency has mandated VGW to confirm cessation of any unauthorized gaming activities within ten days of the letter's issuance date. Failure to comply may jeopardize VGW's prospects of obtaining future licenses or registrations in Maryland, effectively barring them from the state’s gaming landscape.
Maryland's Strategic Timing Adds Pressure
The timing of Maryland's notification seems strategically poised, arriving just one day after VGW’s representative vocally opposed Senate Bill 860, aiming to ban online sweepstakes casinos in Maryland. With the bill passing unanimously in the Senate and awaiting further hearings, Maryland regulators appear determined to solidify their stance. If VGW refuses to comply, it risks bolstering legislative resolve against online sweepstakes casinos. Conversely, exiting voluntarily would implicitly acknowledge the illegality of past operations, potentially triggering similar regulatory actions in other states.
The Legal Opinion Quandary: A High-Risk Disclosure
Maryland’s demand for a detailed legal justification from VGW significantly escalates the stakes. Despite prior cease-and-desist letters from states like Connecticut, Delaware, and Michigan, Maryland's request for legal opinions supporting VGW's business model is unprecedented. This request places VGW in a precarious position, as disclosing these arguments could inadvertently assist ongoing lawsuits and regulatory actions in other jurisdictions, further increasing their legal exposure.
The legal landscape for sweepstakes casinos remains contentious, marked by increasing scrutiny evidenced by private lawsuits, legislative initiatives, and recent updates to Google’s advertising policies classifying sweepstakes casinos as online gambling.
Broader Impact and Future Implications
VGW now faces a critical decision that could reverberate beyond Maryland. Compliance with Maryland’s demands could set a regulatory precedent, emboldening other states to issue similar demands to VGW and its competitors. Conversely, resistance might seal the fate of online sweepstakes casinos in Maryland and invigorate legislative momentum in other states considering similar bans.
With just days remaining, VGW’s response will likely have significant implications, influencing regulatory trends, legislative actions, and legal strategies across the American gaming sector. This confrontation with Maryland’s regulators, therefore, represents more than a local skirmish—it’s a pivotal moment for the sweepstakes casino industry nationwide.