U.S. Sweepstakes Casinos are gray-market operations that don’t work like fully licensed, real-money iGaming operations. The legal loophole that lets them remain active requires suppressing any mention of U.S. Dollars (USD) or other fiat currencies like Euros, Pounds Sterling, and others.
Any mentions, including symbols like €, £, and of course, $, can become problematic.
How American Sweepstakes Casinos Operate Legally
Essentially, American sweepstakes casinos operate lawfully by complying with other legislation and regulations, including sweepstakes for retail operations and e-commerce.
The full reasoning behind why they can operate without a real-money gaming license is far more intricate, but this is one of the most surprising things for European real-money iGaming operators when they start familiarizing themselves with the American sweepstakes environment.
Even Euros and Pounds Can Generate Compliance Problems in America
Sweepstakes operators in America try their luck within a very narrow, well-defined gray area of state-level American law.
That bold interpretation of laws and regulations by operators and their lawyers, often in the form of legal opinions, is frequently frowned upon by state attorneys general and local law enforcement.
Government authorities aren’t always interested in working hard to find ways of interpreting laws in the most favorable terms possible for the private sector, especially when it comes to casino-like products like a sweepstakes casino slot game or roulette live room.
That said, if an American sweepstakes operator has a supplier of games that converts, for example, slots that are native real money gaming titles, and a faulty game displays a balance in fiat currency instead of Sweep Coins or Fun Coins (the usual alternative internal tokens/currencies used by the sweeps industry), the end result is that the operator can be penalized on the grounds of compliance.
Even if an operator tries to argue that the studio is foreign, in case of a proven faulty display of GBP or EUR on an American sweeps casino player screen, depending on the mood of the prosecutor or AG bringing up the subject in court, the possibility of legal and financial liability remains a reality for the casino.
The Alternative Coin System: Fun Coin and Sweep Coin
The solution for sweepstakes casinos is to adopt a system of virtual internal tokens that are not legal tender, like USD, EUR, or GBP.
The reason for having more than one token also relates to the legal opinions that support these operations, but they’re tied to AMOE, another intricate concept behind why sweepstakes casinos can do business in some American states.
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