Sweepstakes Sites: Real Money Social Online Casinos
Two major sweepstakes sites stand out as the most popular, but are Chumba Casino and Global Poker legal and legit for real money players in the USA? UpdatedOctober 13, 2024
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Sweepstakes Poker Sites
- Global Poker
In the near future, we plan to review other popular sweepstakes gambling sites. We are being careful in our approach to reviewing real money sweepstakes sites, largely due to the grey area of the law they seem to all operate in.
What Are Online Sweepstakes?
If you’ve ever participated in McDonald’s Monopoly contest, you’re familiar with sweepstakes.
The simplest explanation of sweepstakes is they are promotions that select winners at random. That’s not to be confused with contests. Contests are merit-based promotions that fall into a different category – more on the difference between the two in a moment.
Retailers have used sweepstakes since the mid-1900s. Sweepstakes are a type of trade promotion designed to encourage consumers to purchase products. They’re intended to promote product sales, but sweepstakes must possess a “no purchase necessary” option.
Most people are unaware of the “no purchase necessary” part of sweepstakes. For example, if you visit a participating McDonald’s during the Monopoly sweepstakes, you can request a “no purchase necessary” form. This form can be filled in and sent in for a free entry.
This alternative, “no purchase necessary” option is little-known and used by consumers, but it’s the backbone of legal sweepstakes.
Playing At Sweepstakes Sites
If you join Global Poker or Chumba Casino, you are playing with a freemium model. Sign up for a new player account, and the site provides you with its in-game currency. It is free to register, and you receive a set number of Gold Coins at no cost.
Players earn additional Gold Coins by returning often and completing certain challenges. If you run out of coins, you can purchase a package to receive more. Players who buy Gold Coins also receive Sweeps Coins, which function as the in-game currency to win real cash prizes.
This is where the sweepstakes element comes in. At Global Poker, you can use Sweeps Coins to enter promotional tournament events and participate in ring games. In addition, players can win electronics and luxury items or Sweeps Coins, which they can convert to cash.
Similarly, Chumba Casino customers use Sweeps Coins to play casino games and win additional Sweeps Coins. When you’re done, you can redeem them for cash prizes.
At the casino, you must have at least 100 Sweeps Coins to redeem for cash. Before you can redeem Sweeps Coins for cash, you must verify your player account. Verification requires a copy of your photo ID, proof of address, and bank account information.
The Social Media Connection And Mail-In Option
Players can also participate in social media contests to earn additional Sweeps Coins. Social media plays a prominent role in the sweepstakes world as it provides easy access to games and is a marketing model for the provider.
Another option to earn Coins or Cash is to mail the company. A legal sweepstakes provider will offer a mail-in form that provides ‘no-purchase necessary’ participation. Players located in the United States can fill out the form to receive complimentary Coins or Cash, depending on the site.
Depositing For More Gold Coins
Players cannot use Gold Coins to win real cash prizes, but they can use them to play free-money games and earn Sweeps Coins or Cash.
In addition, customers can use Skrill, credit cards, and debit cards to purchase additional Gold Coins. In addition, when users purchase Gold Coins, they also receive a bonus package of Sweeps Coins. The important point to remember is that Sweeps Coins are how players participate in games to earn more Sweeps Coins, which they can redeem for cash.
Understanding Sweepstakes Language
If you are new to sweepstakes sites, it is essential to understand the language they use so you can understand how to participate and win cash prizes.
Let’s use Global Poker as an example. You can join and receive Gold Coins for free to play social poker games. After signing up, you receive 5,000 Gold Coins and can use those to enter Gold Coin games only. Anything you win is essentially for bragging rights only because Gold Coins are not redeemable for cash.
Sweeps Coins function similarly to Gold Coins, but players can only earn them by participating in promotions, requesting them via snail mail, or as a bonus for purchasing Gold Coin packages. Once a player has Sweeps Coins, they can enter Sweeps Coins games and earn additional Sweeps Coins they can redeem for cash. In other words, Sweeps Coins are the key to winning real money.
Global Poker usually abbreviates Gold Coins as GCs and Sweeps Coins as SCs.
New players must verify their accounts before the full experience can begin. After the verification process, players have access to more features, including a more extensive selection of Gold Coin package options. The verification process also helps the operator confirm that players are genuine and create a safe and positive gamers community.
The Legality Of Sweepstakes Sites
Because sweepstakes sites resemble online casinos, many players question their legality. So how can popular sweepstakes sites like Global Poker and Chumba Casino operate?
To fully understand the legality of sweepstakes and contests requires understanding how contests and sweepstakes differ, and what constitutes gambling.
Tamara Malvin, Partner at Akerman LLP, a firm that specializes in gaming, hospitality, sports, and entertainment, explained it this way in an interview with BettingUSA’s Steve Ruddock:
“Gambling is comprised of three elements: chance, consideration, and prize. Game promotions stay outside the realm of Gambling because they are missing one of these three essential elements.
“A contest includes consideration and prize, but participation involves skill rather than chance. That is why fantasy sports and daily fantasy sports proponents have argued tirelessly that fantasy is a contest, involving skill, and therefore not a gambling enterprise.
“A sweepstakes is another type of promotion, comprised of only chance and prize. To ensure that a sweepstakes offering does not become an unlawful gambling operation, it is essential that there be no required payment or non-monetary contribution in order to participate.”
That said, like gambling laws, sweepstakes legality is quite nuanced and varies by jurisdiction.
As Malvin explains:
“As with gambling laws and rules, the individual states dictate by statute their stances and regulations pertaining to game promotions. Florida and New York, for example, each require prior submission and effective approval for sweepstakes with prizes valuing over $5,000. Rhode Island is also known for its strict promotions regulation.
“The online offering of a sweepstakes is not only regulated by the state in which the offering company hubs its website or is headquartered, but is regulated by any state in which the company allows people to participate.
Because staying on top of fifty different jurisdictions can be difficult, operators often include the phrase “Void Where Prohibited” in their terms and conditions of sweepstakes participation. That certainly does not fully insulate them, but it is a phrase widely known to consumers as making clear that participation (and therefore prize-winning) requires lawful entry in the first place.”
The million-dollar question is whether or not Global Poker and Chumba Casino fall under sweepstakes laws.
“We continue to see ingenuity in the sweepstakes realm because it is difficult to break into the highly regulated gaming market,” Malvin said. “It is easier and quicker to profit from the production and rollout of a product that feels like gaming but remains technically just outside.”
But as Malvin suggests, are they genuinely remaining outside the real-money gambling box?
“If chance and prize are involved, then there cannot be any form of consideration from the player. That means the player should not be purchasing anything in order to play (another well-known phrase “No Purchase Necessary” governs all sweepstakes). It also goes beyond purchasing. A player should not be forced to provide anything of value that can be viewed as consideration—such thing of value is fairly amorphous; it can even be in the form of “likes” on a social media page, for example.”
Sweepstakes Sites Face Regulatory Risk
Even if their legality is never settled once and for all, sweepstakes sites face increasing regulatory risks as they grow in prominence. This is especially true in states with legal online gambling, where licensed operators contribute significant tax revenue to the state.
For instance, VGW Holdings (the parent company of Chumba Casino and Global Poker) has received cease-and-desist letters from the Delaware Division of Gaming Enforcement (February 2023), Michigan Gaming Control Board (October 2023), and the Connecticut Department of Public Safety (February 2024). Online gambling is legal and regulated in all three of those states.
VGW Holdings exited the Michigan and Connecticut markets in direct response to those letters. Other sweepstakes sites have taken note, and each restricts customers from certain states based on its unique regulatory risk calculus.
Sweepstakes Trade Association: The SPGA
In 2024, ten sweepstakes operators formed the Social and Promotional Gaming Association (SPGA), likely in response to increased scrutiny from regulators and the public at large.
In a statement, the SPGA explained that its mission is to “highlight the well-established legality and legitimacy of social sweepstakes games, providing regulators, policymakers, and consumers with a comprehensive understanding of these offerings.”
Additional details on the SPGA website outline how the organization approaches its four overarching objectives:
- Player Protection: Encourage responsible gambling, establish uniform customer age verification processes, and use current technology to accurately geolocate all players
- Industry Advocacy: SPGA members must establish the legality of their platforms, distinguish their offerings from gambling, and ensure compliance with all applicable laws (state and federal)
- Consumer Education: Advertise responsibly, adhere to best practices in all disclosures, clearly communicate information about the odds of winning, how sweepstakes games work, and ways to participate for free
- Support Industry Growth: Develop rules and regulations for SPGA members that foster innovation while maintaining consumer protection standards
In light of the regulatory risks sweepstakes sites face today, industry advocacy is the SPGA’s most critical mission in the short term.
As Seth Schorr of FSG Digital Inc explained in a statement, the SPGA is “committed to helping regulators and policymakers understand how our industry’s products work and how they comply with the appropriate state and federal laws.”
Sweepstakes Sites Vs. Online Gambling
When it comes to real-money sweepstakes sites, some sites offer casino-style games or lottery drawings, with others provide poker games or simple trivia contests. Players have their pick of entertainment options, like the games they would find at any poker site or online casino.
However, one of the primary differences with sweepstakes sites is they provide means by which players can participate for free.
Global Poker classifies itself as a social poker game similar to Zynga Poker. Users compete against other users using virtual playing tokens called Gold Coins.
Global Poker (as well as Chumba Casino) incorporates a freemium model. Like other freemium games, free Gold Coins are available to Global Poker and Chumba Casino players every day. Additionally, players can purchase additional Gold Coins.
Where does the sweepstakes element enter the equation?
Global Poker uses sweepstakes to promote the sale of Gold Coins.
Entry into these sweepstakes is through tokens called Sweeps Coins. Players can then participate in the sweepstakes as gameplay using Sweeps Coins.
Sweeps Coins are obtained free as a bonus with the purchase of Gold Coins or, like with McDonald’s monopoly game, through a no-cost alternative method. Sweepstakes Coins won from sweepstakes games can then be redeemed for gift cards and cash prizes.
So, in addition to being a social poker site, Global Poker incorporates a promotional sweepstakes component that provides players with the chance to win real prizes. The games are always free to enter, with the all-important “no purchase necessary” caveat. That’s what distinguishes Global Poker from real money online poker sites.
By contrast, online casinos and poker sites meet the legal definition of gambling. They allow their users to risk real money in return for a chance to earn real prizes.
However, gambling laws vary around the US, and sweepstakes gambling sites often employ the phrase ‘void where prohibited.’ The phrase does not grant them total legal protection, but it does inform users that participation is limited in some locales. For example, most sweepstakes sites prohibit participation from customers located in Washington State for this reason.
Are Sweepstakes Betting Sites Safe?
Some sweepstakes gambling sites seem safe, but there are no guarantees due to the unregulated environment in which they operate.
Unlike full-fledged sportsbooks and online casinos that operate under state-issued licenses, sweepstakes sites are largely unregulated. The lack of regulation can result in controversies and mistrust, as was the case with a Fliff Social Sportsbook incident.
Sweepstakes sites headquartered in the US are subject to antifraud laws and civil suits, but that’s a far cry from the highly regulated environment in which licensed betting sites operate. As a result, sweepstakes sites can get away with things like questionable withdrawal rules, vague promotional terms, and financially risky business models.
The best bet for anyone who wants to try their hand at a sweepstakes site is to do research. A quick search online can reveal how long that site has been in operation, whether it’s well-known, and other customers’ experiences.
An alternative option for sports fans in particular, are predication-style fantasy sites that allow customers to make quick picks against the house for fixed payouts. Sports prediction sites like PrizePicks, OwnersBox, and ParlayPlay host games that look and feel a lot like prop bets and parlays. They offer the advantages of holding licenses in states that regulate daily fantasy but with more widespread availability than pure sports betting sites.
Mike Murphy Gambling Industry Expert Mike Murphy is the founder of BettingUSA.com and has over 10 years of experience in the legal gambling industry. A regular attendee of industry trade shows and conferences, Mike is a strong proponent in the idea of a well regulated online betting industry.
Steve Ruddock Content Director / Legal Analyst Steve Ruddock is the content director for BettingUSA and the Editor-in-Chief of Gaming Law Review.
Steve has covered the legal and legislative developments in the US gambling sector for more than a decade for online and print publications.
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