VGW Announces Phase Out Of Sweepstakes In New York

VGW, the parent company of popular platforms like Chumba Casino, LuckyLand Slots, and Global Poker, has announced a significant shift in its operational strategy: the phasing out of its sweepstakes casino games for players in New York.

“Following careful consideration, we’ve officially notified our players about the decision to phase out Promotional Play (sweepstakes promotions) in New York,” stated a representative from VGW. This strategic move is designed to comply with evolving regulatory standards in the state.

Beginning June 2, the issuance of Sweeps Coins will cease, with users unable to play games with any remaining coins in their accounts by July. By August 1, players will no longer be able to redeem these coins for prizes.

While VGW will discontinue its sweepstakes offerings, players will still have access to a selection of free-to-play games on its platforms. In an email sent to New York players, VGW emphasized its understanding of the impact this decision may have, acknowledging, “This adjustment may disappoint many of our loyal players. However, this decision was made in the best interests of all stakeholders following extensive deliberation.”

Legislative Changes Push for Operator Exits

The decision to limit operations in New York comes in response to the advancing Senate Bill SB5935, which seeks to redefine and regulate the criteria for dual-currency gaming systems. As this bill continues to gain traction, multiple sweepstakes operators—including High 5 Games, Hello Millions, McLuck, Funzpoints, RealPrize, and Zula—have already exited the state within the past month.

The Social and Promotional Gaming Association (SPGA) has publicly criticized SB5935, arguing that it poses unnecessary risks to New York’s economy. In a statement, they remarked, “This amendment is a clear acknowledgment that this anti-business legislation threatens the economic fabric of our state. Lawmakers should note that this approach could lead to significant fallout.”

While VGW is not affiliated with the SPGA, the company has established a new lobbying entity, the Social Gaming Leadership Alliance (SGLA), to advocate for the legality of sweepstakes and social casinos more broadly.

Senate Bill SB5935 has yet to receive final approval and faces an imminent deadline of June 12, coinciding with the conclusion of the New York legislative session. Additionally, a counterpart bill in the Assembly, AB6745, is scheduled for a committee hearing on May 28.

VGW’s Withdrawals from Multiple States

New York marks the latest jurisdiction from which VGW has withdrawn its offerings, joining a growing list that includes Connecticut, Delaware, Idaho, Michigan, Montana, Nevada, and Washington—all previously impacted by legal scrutiny regarding their operations.

The potential financial implications of these withdrawals cannot be understated. The New York online casino market, despite regulatory constraints, generated an impressive $4.3 billion in revenue over the past year—the second-highest figure in the nation, surpassed only by Pennsylvania’s combined revenue from sweepstakes and regulated online casinos.

For the fiscal year ending June 30, 2024, VGW has projected revenues exceeding $4 billion, a notable increase from $3.1 billion the year prior. The company also reported a profit margin of $323.5 million during this period, although future profitability could face challenges as more states tighten regulations on their operations.

As the gambling landscape continues to evolve, VGW’s proactive approach illustrates the need for companies to stay agile in regulatory environments, ensuring compliance while still striving to engage and retain their user base.

With increasing legislative pressures and shifting consumer preferences, the future of online gambling will demand innovative strategies and steadfast advocacy to navigate the complexities ahead.

Adam Roarty is a seasoned writer with extensive experience in the gambling sector, having contributed as a content creator and editor for leading publications such as Oddschecker, CoinTelegraph, and Gambling Industry News. His expertise includes in-depth knowledge of sports betting and online gambling dynamics.