In a moment that seemed impossible two years ago, representatives from Indian Country and the Sports Betting Alliance (SBA) in the U.S. October 23 had a meaningful conversation about how to fight – together – against sweepstakes.
Victor Rocha invited lobbyist Jeremy Kudon, who represents the SBA (comprising BetMGM, DraftKings, Fanatics and FanDuel) to share his thoughts on the rise of sweepstakes. That is the latest “unregulated, unlicensed and untaxed” gambling to emerge in the last year. Rocha is in the midst of a five-part series on sweepstakes and pick’em-style fantasy contests, as he seeks to educate California tribes.
Sweepstakes offer gaming without initially using real money. In legal sports betting and iGaming, consumers stake accounts with cash or cash equivalents. In sweepstakes, the games start off free to play, but then consumers can purchase “coins” or “virtual cash” with which to wager.
Recently, the legal industry has not only taken notice of the rise of sweepstakes, but is starting to educate itself on what it says is already a multibillion-dollar industry. The goal is to stop sweepstakes platforms from continuing to proliferate.
Because sweepstakes are unregulated and untaxed, the billions of dollars sweepstakes companies earn, the panelists said, are coming out of the pockets of commercial operators and tribes alike. States are also giving up tax dollars.
“With all the focus on Underdog, PrizePicks, and (others), maybe we were missing the bigger picture” of sweepstakes, Kudon said.
Kudon works for the legal firm Orrick and, although it does not appear that he represents any sweepstakes operators, his company does, according to its website. Among them is VGW, which operates as “Chumba.”
