Chicago…In response to recent news stories uncovering alleged corruption relating to the sweepstakes machine industry, State Representative Brad Stephens (R-Rosemont) has co-sponsored legislation to ban them under Illinois’ video gaming laws.
“Sweepstakes machines are set up to look and operate like gaming terminals and are deceptively marketed in a way to circumvent the State’s gambling law. The only reason they are in operation today is because they exploit a loophole in state law,” said Stephens. “The fact that these machines are operating in the dark by vendors who are unable to obtain a video gaming license is very concerning.”
The sweepstakes industry has come under scrutiny recently. The FBI recorded now former Illinois State Representative Luis Arroyo (D-Chicago) offering to pay a $2,500 bribe to a state senator, who was wearing an undercover wire, in return for supporting ‘sweepstakes’ legalization. Arroyo was also a lobbyist for the ‘sweepstakes’ industry. Additionally, it has been revealed by the Sun-Times, at least three ‘sweepstakes’ industry lobbyists violated state law by failing to register.
“The recent activities that have come to light involving the sweepstakes industry are disturbing. State and local government officials are lobbying for the industry. These industry insiders are not registering as lobbyists as required by law, and at least one elected official who was lobbying was recorded offering a bribe,” emphasized Stephens. “The sweepstakes industry, at the very least, needs to be regulated similarly to the video gaming industry.”
In many ways, sweepstakes machines and video gaming are similar. Officially, these machines act as kiosks for “product promotion.” This means that a person can pay cash to the machine, and could receive a coupon for a discount on items on a website, then gets the chance to win cash by playing a slots-like game.
Sweepstakes machines take advantage of a loophole in the IL Gaming Act to avoid the same regulation as legal video gaming terminals. Unlike video gaming terminals, these machines do not fall under the same state oversight, nor are taxes on them paid to state and local governments. Legal operators must register each gaming terminal with the Illinois Department of Revenue (IDOR). However, none of the protections provided to players of legal gaming terminals under the video gaming law are provided to sweepstakes machines users. Sweepstakes machines also lack background checks on operators and guaranteed payouts for players.
House Bill 3940, whose chief-sponsor is Rep. Tim Butler (R-Springfield), expands the definition of “gambling device” under state law to ban these unregulated devices. Currently, the legislation has over two dozen bipartisan co-sponsors, including Rep. Stephens.