As US lawmakers and regulators continue to tighten the screws on sweepstakes operators, VGW is pulling out of Canada. The company said it will use the freed-up resources to further focus on the US market.
A VGW spokesperson confirmed to iGB on Tuesday that the company is phasing out Chumba Casino and Global Poker in Canada. The company will finish those operations on 23 October.
“This decision wasn’t taken lightly and our focus is on ensuring players are fully informed about the changes and that this transition is as smooth as possible,” the spokesperson said. “Ultimately, this is a difficult but strategic, isolated decision.
“Our Canadian business is relatively small, as the vast majority of our players reside in the larger US market, where we will concentrate our management focus, resources and investment going forward.”
The decision did not stem from pressure from Canadian regulators, the company says.
The full phase-out plan allows users to purchase Gold Coins until 28 August. Gameplay will stop on 25 September but users can redeem sweeps coins until 23 October. The operator has been active in every province other than Quebec, where there are prohibitions on social gaming.
Sweepstakes giant turns focus to US as market shrinks
The VGW pivot to focus on the US comes as multiple state regulators and legislators have acted against the sweepstakes industry. Sweepstakes sites are “dual currency” and offer non-monetary “gold coins” and “sweeps coins” that can be used for real-money prizes. Critics of the industry argue the dual-currency model skirts existing online gambling laws.
New Jersey Governor Phil Murphy this month signed a bill that bans sweepstakes operators from the Garden State. Connecticut and Montana also enacted similar laws this year. The Nevada Legislature voted to allow broader enforcement against unlicensed gambling operators but did not explicitly include sweeps.
Louisiana Governor Jeff Landry vetoed his legislature’s effort to ban sweepstakes, explaining the Louisiana Gaming Control Board had enough jurisdiction to act on its own. Shortly after the veto, the LGCB sent 40 cease-and-desist letters to unregulated operators, including many sweepstakes sites.
New York Governor Kathy Hochul has yet to act on a sweepstakes bill that made its way through the legislature. Still, New York Attorney General Letitia James sent 26 cease-and-desist letters to unregulated operators. Both sets of cease-and-desist letters included VGW. Michigan, Arizona and Mississippi are among other states that have sent cease-and-desist letters to unregulated sweepstakes operators, including VGW.
VGW has pulled out of or reduced sweepstakes play in at least 11 US states amid the escalating regulatory crackdown.
California sweeps bill working through legislature
Lawmakers in California in June amended a tribal gaming bill, AB 831, to include a proposed sweepstakes ban. It has passed multiple committees and is scheduled for a hearing in the Senate Appropriations Committee on Friday.
While most of California’s tribes support the sweepstakes ban, one tribal nation recently partnered with VGW and testified against the bill in a legislative hearing last week.
This month, Kletsel Dehe Wintun Nation of Cortina Rancheria’s economic development arm and VGW aligned to offer free-to-play online social games in California.
VGW is a leading member of the Social Gaming Leadership Alliance, which is working nationwide to champion the sweepstakes industry. Along with the SGLA, the Social and Promotional Games Association is another industry group arguing the games are legal.
The American Gaming Association, though, remains a strong opponent of sweepstakes sites. A recent AGA study found that 59% of survey respondents say sweeps are “definitely gambling”, with 31% saying they are “probably gambling”.
VGW sites Chumba Casino and Global Poker will end operations in the Great White North in October.