Mentioning Dollars and Euros: The Compliance Mortal Sin of Sweepstakes Operators
A few weeks ago, I was having coffee with a friend based in Malta. She has worked for years in the real-money iGaming industry and was starting to study the sweepstakes market.
She asked a very interesting question: “What would be the first thing you would explain to someone with real-money iGaming experience who is now learning about the American sweepstakes market?”
Well, apart from the basic concept that users must be granted an alternative method of entry—i.e., in practice, allowing them a chance to play for free—there is one key word that summarizes the difference between sweepstakes and real-money iGaming casinos: compliance.
The Wording Challenge: Forbidden Words and Eternal Vigilance at Sweepstakes Casinos
Essentially, it’s completely forbidden to mention real-money currencies such as dollars or euros.
Why? This derives from the usual legal opinions that sustain the sweepstakes market as a viable gray operation in America and elsewhere.
These legal understandings allow operators to market the product as something that is not legally an online casino and, therefore, does not require a traditional gaming license.
Special taxation and licensing have been discussed very frequently since the market’s inception.
So the first thing my real-money exec friends should know is that sweepstakes operators and platforms work hard to stay compliant.
Operators and platforms have an internal dictionary of what can and cannot be said on sweepstakes pages.
There should be no currency symbols whatsoever—like $, €, or £.
Although it might sound counterintuitive, these mistakes happen frequently and must be dealt with. But why is that the case?
How can the € Symbol Appear in an American Operator Involuntarily?
Well, a large portion of the GSPs serving American sweepstakes casinos are European, and the games converted to the sweepstakes market use special virtual token currencies to avoid mentioning real money.
Typical examples are FC and SC. The GSP and the operator then assign an internally-pegged value against real currency for invoicing purposes, but the game, is, technically, not displaying real-money references.
So any reference to the native currency of the game, whether it is EUR, GBP, or USD, must be removed completely.
Bugs, however, do happen, especially within the environment of complex operations like Game Providers.
The coding is no joke, especially when you consider the number of interconnected parties: aggregators, operators, and certification laboratories.
So staying compliant is extremely important for sweepstakes operators.
Legal Risks for Sweepstakes Operators:
America VS Real-Money iGaming in Europe
It is also important to bear in mind that the U.S. is a very different legal environment, and U.S. state jurisdictions are much more prone to litigation than most European countries, including governing bodies and legal entities like prosecutors’ offices and state attorneys general.
One small mistake can shut an operation down or result in enormous legal fees.
That said, the American sweepstakes market surely isn’t for the faint of heart.
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