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In a week marked by the death of sweepstakes casinos in a key state and the indictment of a crypto casino fraudster, there was good news for the sweepstakes casino industry from two of the most anti-gaming states in the nation.
New Jersey Sweeps Ban Aims to Boost Legal Online Casinos
New Jersey’s much-publicized law banning sweepstakes casinos went into effect on Thursday, ending the operation of sweeps casinos offering real prizes such as merchandise and cash. The ban is the latest in a series of legal actions and threats against sweepstakes casinos.
The move is expected to benefit the state’s thriving regulated online casino industry, as sweepstakes casinos are typically run by offshore companies and divert revenue from iGaming platforms.
Sweepstakes bans continue to be a sore spot for industry advocate The Social & Promotional Games Association (SPGA).
“New Jersey has led the way in gaming regulation — not followed. With innovative licensing frameworks for digital entertainment, the state sets the standard,” the SPGA wrote in a press release about the ban. “This smart, forward-thinking approach should continue, not be replaced by outdated prohibition.”
Several sweepstakes casinos already barred New Jersey players before the ban, including Jackpota (as recently as June), McLuck, Chumba and High 5.
Online Casino Fraud Case Targets Crypto Entrepreneur
A grand jury has indicted a former banking executive and crypto-based online casino founder for using more than $4 million of investor funds to gamble. Richard Kim, founder of Zero Edge, “misappropriated” investment dollars “by transferring them to personal accounts, where he made leveraged cryptocurrency trades and gambled away substantially all the company’s money,” court documents say.
During the summer of 2024, Kim transferred millions into a personal crypto account and then moved money into his account at Shuffle.com, an offshore crypto casino and sportsbook. After gambling the investor funds, the company was left with roughly $700,000, court records show.
Kim sent a series of emails to investors and colleagues admitting to losing the company’s funds but left out one key detail.
“He concealed from the company’s investors that he had misappropriated the funds and used them at an online casino,” court records state.
Kim faces two felony charges and up to 20 years in prison, according to the U.S. Attorney’s Office for the Southern District of New York’s DOJ press release.
McLuck Sweepstakes Casino Returns to Alabama and Georgia
In an era when sweepstakes casinos face legal pressure in states from California to New Jersey, the industry had a small win this week as McLuck re-entered the Alabama and Georgia markets.
McLuck has been absent from Alabama and Georgia for more than a year, according to archived versions of the sweeps casino’s website.
Players in Alabama and Georgia can take advantage of McLuck’s new-user promotions. For example, new players can earn 57,500 gold coins and 27.5 sweepstakes coins through promo code PLAYBONUS.
McLuck is now available in 37 states and the District of Columbia, according to its website. The 13 excluded states include five states with legal online casinos: Connecticut, Delaware, Michigan, New Jersey, and West Virginia.
