Louisiana AG: Online Sweepstakes Casinos Are Illegal

Louisiana Attorney General Liz Murrill has written an opinion declaring online sweepstakes casinos to be illegal in the Pelican State.

The opinion, released Wednesday, came in response to a question from state Sen. Rick Edmonds, who inquired to the attorney general’s office in a letter dated June 18: “Does Louisiana law permit online businesses to operate casino-style gaming activities? Specifically, is it lawful for such businesses to operate gaming platforms that purport to be sweepstakes or social gaming?”

Murrill’s opinion is not surprising considering the Louisiana legislature passed SB 181 in unanimous fashion earlier this session in a bid to have online sweeps declared illegal. Gov. Jeff Landry, however, vetoed the bill last month for multiple reasons. He found Sen. Adam Bass’ bill “overly broad” and expressed confidence in multiple state agencies, including the attorney general’s office, in combating such activity.

“We are disappointed by the Attorney General’s opinion and fundamentally disagree with the notion that these platforms are operating outside the bounds of the law,” said Jeff Duncan, executive director of SGLA and former U.S. Congressman, in a statement. “Our partners offer free-to-play entertainment based on long-standing promotional sweepstakes models used legally by consumer brands across industries. This is not gambling—it’s marketing.”

Response and statutes

“Following a review of applicable Louisiana statutes and legal precedent, it is the opinion of this office that online businesses offering casino style games—purporting to be sweepstakes or social gaming platforms—are operating in violation of Louisiana law. These activities constitute illegal gambling and illegal gambling by computer under multiple provisions, including but not limited to La. R.S. 14:90, La. R.S. 14:90.3, and La. R.S. 51:1721 et seq.”

Murrill cited the Louisiana state constitution and multiple state laws in her opinion, starting with the fact that “[g]ambling shall be defined and suppressed by the legislature.” Specifically, article XII, § 6(C) of the constitution states no gambling or wagering shall be conducted “unless a referendum election on a proposition to allow such gaming, gambling or wagering is held in the parish and the proposition is approved by a majority of those voting thereon.”

That was how Louisiana legalized sports wagering on a parish-by-parish basis via referendum in November 2020. As a result, all but nine of the 64 parishes in the state offer either retail or mobile sports betting.

Further, Murrill noted, “Internet gaming or iGaming or the offering of casino-style games online is not a legal form of gaming in Louisiana, as no law authorizing it has been passed nor any election for such has been conducted.” Additionally, Murrill noted state law prohibits such activities.

In reference to the state’s revised gambling statutes, Murrill noted that Louisiana law does not “distinguish games of skill versus games of chance” and that the statute is violated when “someone other than the participant receives a benefit.” With online sweepstakes players purchasing virtual currency and receiving bonus credits to play games for “the chance to win cash and prizes,” Murrill said the “sale of these coins along with the chance to win money and the ongoing operation of these platforms amounts to illegal gaming as a business.”

To further drive that point home, Murrill opined that “when entry fees are charged and the operator retains a portion of those funds while awarding prizes to players, the activity constitutes illegal gambling under Louisiana law.”

A recall to internet cafes

In her opinion, Murrill likened online sweepstakes casinos to internet sweepstakes cafes, which were popular during the 2010s. She said online sweeps operators were using the same concept as the cafes in which players would pay for “access time,” play casino-style games, and receive “sweepstakes points” that could be redeemed for cash and other prizes.

In response to the internet cafes, the state legislature passed a bill that “criminalizes the operation and promotion of games, contests, or lotteries where participants risk something of value to win a prize through electronic gaming devices or simulated gambling displays.” Murrill said the law can be applied broadly to “include computers and apps that simulate gambling and use predetermined outcomes, software-driven prize allocation or incremental prize reveals.”

“Millions of Americans have safely enjoyed these games for more than a decade,” Duncan countered as part of his statement. “We urge Louisiana officials to engage in a constructive, fact-based dialogue about how best to provide clear, modern regulations that protect consumers, encourage innovation, and reflect the reality of today’s digital entertainment landscape.”

In addition to citing legal precedent to back several of the statutes, Murrill noted Landry’s veto “acknowledges the current illegality of these business and websites.” The governor stated in his veto message that “gambling activities on the internet … are already prohibited in Louisiana” and the state’s gaming control board, the attorney general’s office, and the LSP Gaming Division can continue to issue cease-and-desist letters to illegal operators.