Sweepstakes casinos thrive by exploiting legal loopholes

A group of online companies called sweepstakes casinos is operating in a legal gray area. They are offering games like slots and blackjack, which are typically illegal for real money play in many states. Instead of functioning as traditional casinos, these companies use a loophole that allows them to promote their services legally. The key to their operation is the "no purchase necessary" rule. This is similar to promotions like McDonald's Monopoly where participants can get game pieces without spending money. Sweepstakes casinos sell a form of online currency, often called Gold Coins. While players buy these coins, they cannot be exchanged for real money, making them technically valueless. By purchasing Gold Coins, players receive something called Sweepstakes Cash. This cash can be used to play games, and any winnings can be converted back into actual money. This way, sweepstakes casinos maintain a legal status while drawing in large revenues. In the past five years, their earnings have increased tenfold, and they even have high-profile advertisements featuring celebrities. Recently, states such as New York and Maryland are starting to take notice. With tax revenue potentially at stake, they are considering regulations against these sweepstakes casinos. However, the loophole complicates their efforts to implement stricter laws.