We recently published two opinion pieces with opposing views on the gaming legislation before the General Assembly: this one against online casino gaming, this one in favor. Here’s yet a third point of view.
HB 161 and SB 118 would bring online casino gambling, or iGaming, to the state of Virginia. If you read an iGaming proponent’s recent op-ed, you would be led to believe the altruistic motives of protecting consumers, keeping minors from gambling and providing responsible gambling safeguards are first and foremost in the minds of the operators who stand to make billions through iGaming in Virginia over the next decade.
But one key provision of these bills undermines their pro-consumer, pro-protection argument — buried within this bill is a provision aimed directly at banning longstanding Social Plus and sweepstakes games that have been responsibly and unobtrusively operating in the commonwealth for over a decade. Many people may not be familiar with these games — they’re certainly not household names like FanDuel and DraftKings that have blanketed the airwaves for years — but for 300,000 Virginia adults who love these games, they are a safe and fun outlet for free and low-cost online entertainment. Most people play these games for free, never making a purchase of any kind. And those who do spend money on Social Plus games spend drastically less than the average iGaming customer.
Moreover, the Social Plus companies in the Social Gaming Leadership Alliance (SGLA) utilize the very same protections that iGaming supporters cite as essential to consumer safety: Age and identity verification? Check. Ages 21 and over only? Check. Anti-money laundering protocols? Check. Responsible gaming protocols? Check.
Proponents of iGaming are concerned with a lack of safety standards for online gambling, and their answer is naturally to regulate iGaming. This is an absolutely valid argument. But the same logic holds true for Social Plus games — regulation would bring transparency and mandatory consumer protections to the industry, and new revenue to the commonwealth. If regulation is good for the goose, it’s also good for the gander.
Likewise, the op-ed states, “Prohibition does not stop gambling. It does not prevent harm to citizens. It simply pushes consumers into the shadows and, worse, fails those needing help.” This statement is equally valid. So then why would the iGaming supporters push for a ban on a Social Plus industry, with an established customer base of 300,000 Virginians, that would force safe, law-abiding companies to vacate the state? A ban would leave Virginians who love these games with two options: 1) sweepstakes websites that don’t follow the law and subject customers to exploitative practices; or 2) real-money gambling websites. iGaming supporters plainly state that the intent of iGaming legislation is not to encourage anyone to gamble, yet their simultaneous support for a policy that aims to eradicate free and low-cost alternatives to their own product could certainly be interpreted otherwise.
Putting aside policy motivations, there is ample room for both iGaming and Social Plus in the online ecosystem — each one serves a different consumer base with different purposes. Studies from states like Michigan have shown that the absence of Social Plus or sweepstakes games has no appreciable impact on iGaming revenues. So why not regulate both, enact appropriate safeguards, generate even more revenue and give Virginia adults safe options to choose how they entertain themselves online?
There is a reasonable policy solution here, and one that the Senate has already endorsed via SB 579, calling for the Lottery Commission to conduct a robust study of interactive online sweepstakes games. Virginia lawmakers and agencies have extensively studied every other gaming issue — casinos, iLottery, fantasy sports, sports betting and iGaming — prior to deciding on a policy pathway forward. Social Plus deserves the same study and deliberation, not an abrupt ban based upon misinformation from real-money gambling companies.
iGaming supporters’ logic, if applied consistently and without favor to certain ordained stakeholders, provides a rational and appropriate solution. Regardless of whether iGaming becomes law, Virginia lawmakers should take a longer look at regulating the Social Plus industry on its own merits.
Sean Ostrow is Managing Director of the Social Gaming Leadership Alliance (SGLA).