Sweepstakes Giant VGW Told to Leave Maryland, Submit Legal Review

The Maryland Lottery and Gaming Control Agency has recently issued a stern warning to Virtual Gaming Worlds (VGW), the Australian company behind popular sweepstakes casino sites like Chumba Casino and Luckyland Slots. In an assertive move, the state regulator informed VGW in a detailed email on March 12th that the operator was conducting online gaming activities in Maryland without proper authorization. This move comes just one day after VGW's lobbyist testified against a Senate bill aimed at banning online sweepstakes casinos in the state.

Cease and Desist or Face Consequences

Managing Director Michael Eaton's letter explicitly emphasized that Maryland only allows mobile and online sports wagering and fantasy competitions, strictly prohibiting other forms of online casino gaming or iGaming. The agency demanded immediate confirmation from VGW regarding their operations, outlining a deadline of March 27, 2025.

VGW was instructed to provide detailed descriptions of any ongoing gaming activities, including mobile links and specific gaming names. Crucially, the agency also requested a comprehensive legal analysis or opinion interpreting Maryland law to justify VGW's gaming offerings without state licensure or registration.

Potential Fallout from Noncompliance

Should VGW decide not to comply, the Maryland Lottery warned that this could severely compromise the company's future licensing opportunities within the state. Conversely, if VGW confirms its market exit, it would indirectly acknowledge that its prior activities were not legally sanctioned, potentially influencing regulatory actions in other jurisdictions.

The timing of this regulatory notice, occurring just after Senate Bill 860 passed unanimously in the Senate and before further legislative hearings, appears strategic. It increases pressure on VGW to either accept the regulatory conditions or risk further legislative and legal challenges.

The Opinion Letter Dilemma

While VGW has faced cease-and-desist orders from other states such as Connecticut, Delaware, and Michigan, Maryland’s request for a legal opinion letter is the first of its kind. This request could force VGW to reveal the legal basis for its business model, something the company has avoided despite multiple lawsuits and rising scrutiny nationwide.

Given VGW's involvement in approximately 20 lawsuits and mounting legislative hostility, it is unlikely that VGW would voluntarily disclose its legal strategy, potentially aiding adversaries in future legal disputes. Additionally, Maryland Attorney General's known vigilance against illegal online gambling heightens VGW's risk of facing civil enforcement actions.

Broader Implications for Sweepstakes Casinos

VGW's response, due within 10 days, will significantly influence the legislative landscape across multiple states. A refusal to comply may boost the passage prospects of Maryland’s SB 860, setting a precedent that could sway similar legislative efforts in states like New York, New Jersey, Connecticut, Florida, and Mississippi. Alternatively, VGW’s voluntary exit could encourage other states to take comparable regulatory actions against sweepstakes operators.

This decisive regulatory stance by Maryland marks a critical moment for the online sweepstakes casino industry, highlighting the intensifying legal scrutiny and regulatory actions shaping the future of online gaming.