Maryland advances legislation to ban online sweepstakes casinos and impose strict penalties

Maryland lawmakers have advanced legislation aimed at prohibiting online sweepstakes casinos and penalizing those who facilitate their operation or promotion. Senate Bill 860 (SB 860), introduced by Sen. Paul Corderman, passed the Senate Budget and Taxation Committee on March 7, moving the state closer to a legal framework that would criminalize such gaming activities.

The bill, titled "An Act Concerning Gaming – Prohibition of Online Sweepstakes Games and Revenue from Illegal Markets," would empower the Maryland State Lottery and Gaming Control Agency to revoke or deny licenses to any operator found to be deriving revenue from illegal gambling activities.

It also seeks to formally define online sweepstakes games and establish penalties for violations. The legislation describes online sweepstakes games as contests, promotions, or games accessed via mobile devices or computers that use a dual-currency payment system where players can exchange currency for cash prizes or equivalents.

Under the bill, online sweepstakes gaming would not be limited to casino-style games such as slots, video poker, and table games but would also include lottery games, eInstants, keno, bingo, and sports wagering. However, the restrictions would not apply to games that do not award cash prizes or cash equivalents.

Additionally, the bill stipulates that any entity assisting an illegal sweepstakes casino, including licensed operators, financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates, could face penalties under Maryland law. Violators could face up to three years in prison and fines ranging from $10,000 to $100,000.

The proposed ban comes amid a broader national conversation on the legality and regulation of online sweepstakes casinos. The Maryland Lottery and Gaming Control Agency has sent cease-and-desist letters to over 10 sweepstakes casinos and sportsbooks thus far this year, labeling them illegal and demanding they block access to Maryland residents.

Maryland’s approach contrasts with how other states are handling the issue. New Jersey and Mississippi have taken a different stance, with lawmakers proposing regulations rather than outright bans. New Jersey Assemblyman Clinton Calabrese initially introduced legislation to legalize and regulate sweepstakes casinos in line with other state-licensed online gaming operators.

However, Calabrese later reversed his position, introducing a new bill that would ban sweepstakes-based wagering and impose penalties for unlawful gambling activities. Maryland’s SB 860 passed through the Senate’s Budget and Taxation Committee on March 7 without any opposition.