Social Gaming Trade Association Forms to Combat Attack on Emerging Industry

Social Gaming Trade Association Forms to Combat Attack on Emerging Industry

Key buzzwords in the US gaming sector at present are “sweeps,” “sweepstakes,” and “social gaming.” 

Advocates for social and sweepstakes casinos assert that the online sites and mobile applications offer enjoyment to countless players in a secure, risk-free setting. Critics contend that numerous such establishments are conducting illegal gambling, enticing players with complimentary tokens, who subsequently are motivated to deposit actual money and start wagering for cash. 

A newly formed trade organization named the Social & Promotional Games Association (SPGA) aims to counter the unfavorable assertions. The SPGA argues that social casinos featuring sweepstakes prizes “comply with the traditional model of social casinos and simultaneously provide promotional sweepstakes rewards for players.” 

The SPGA is made up of various social sweepstakes companies, such as 10 Ten Gaming, Blazesoft, Fliff, FSG Digital, Gold Coin Group, High 5 Entertainment, KHK Games, Kickr Games, Octacom, Rolling Riches, and Woopla Gaming. 

Social Groups Assemble 

Social gaming isn't a recent phenomenon. For years, users of social media have engaged in free-to-play online slot machines and table games where no real money could be earned. The companies earn income by offering extra tokens once a player's initial and regular daily or weekly free play allocations are depleted. 

A more recent idea in the social gaming space includes sweeps. Sweepstakes casinos first adopt the social gaming approach by offering new accounts complimentary credits to play. 

When those bets or spins fail, players have the option to acquire more plays or buy an alternative virtual currency that can be used to earn rewards, often including cash. Critics argue that these ventures contravene state and federal gambling regulations. 

In a recent investigation into the sector, The Washington Post featured the story of a 41-year-old individual who invested and subsequently lost nearly $100K in a social sweepstakes casino. The SPGA claims that such events are unusual.

"The majority of social sweeps customers never spend money. Over two-thirds of customers at a typical SPGA member site are free-to-play only,” the SPGA told Casino.org.

The SPGA states that the business models of its members resemble the strategies employed by large retailers such as Walmart and Starbucks, which utilize online sweepstakes promotions to distribute cash and prizes.

"U.S. consumers view social casinos as genuine entertainment products, spending over $40 billion playing social casino games over the last decade,” the SPGA said. “Rewarding those players and promoting play using the well-established sweepstakes model is no different than some of the world’s biggest companies using sweepstakes to promote the sale of any other bona fide consumer good, such as coffee or hamburgers.”

Certain states have differing opinions. Legislators and regulators in multiple states and areas, such as Idaho, Kentucky, Louisiana, Michigan, Montana, Nevada, and Washington, DC, have deemed social sweepstakes casinos as illegal gambling and have issued cease and desist notices to operators such as High 5 Casino. 

Regarding the SPGA 

Established earlier this year, the SPGA describes itself as a “member-driven organization” committed to informing state and federal legislators, as well as the public, about the social sweeps sector. 

SPGA members have pledged to restrict real-money gaming to individuals aged 18 and above and to use “regulation-grade” technology to “confirm player identities.” They have also committed to following best practices in advertising, fair competition, and consumer safety.