Arizona Targets Unlicensed Casino Sites

Arizona joined at least a dozen other states in issuing cease-and-desist letters to Casino Sweep operators this week. As we’ve noted in other articles discussing various states’ attempts to prohibit these types of operations, state law obviously differs from jurisdiction to jurisdiction on exactly what gambling is and how it is defined.

And, of course, we have laws on various sweepstakes, like gambling offerings, which generally only serve to muddy the waters a bit further. The sweepstakes exception in Arizona is laid out quite clearly in A.R.S. 13-3301(6). The Arizona Revised Statutes state that you must allow participation for free with no consideration or purchase required. Participants who can play for free are given the same odds and games as those who have given money or other consideration. And operators must clearly and conspicuously provide and display the option to participate for free.

Otherwise, you fall foul of A.R.S. 13-3303-3305, which clearly makes it a crime to engage in, promote, or benefit from gambling in Arizona. Each count is a Class 1 misdemeanor in the Grand Canyon State, carrying a potential jail term of up to 6 months and a fine of $2,500. 

Though to be clear, A.R.S. 13 3304 (b) clearly states that benefiting as a player from social gambling is not unlawful, so certainly if you have been playing a little Starburst slot or Blood Suckers 2 slot with McLuck or High Five, it seems unlikely that the Arizona Department of Gaming will be busting your door down anytime soon. 

The same may not be true for casino sweeps operators Modo or Bit Modo LLC, which have been operating in the state under the names Modo.us or Epic Hunts, as mentioned in the ADG Press Release. 

While these are not by any means the biggest names in the casino sweeps industry, they do show that the Arizona Department of Gaming is closely monitoring sweeps operators and is willing to take whatever steps it deems appropriate when it finds egregious behavior. 

Two other firms, MyBookie and BetUS.com, which also received cease-and-desist letters, are actually some of the biggest operators in the offshore gaming and sports betting scene. It’s interesting that the ADG only targeted two sites at this time, as these grey market offshore operators don’t have the protections of sweepstakes law to hide behind. 

It is usually a pretty straightforward case to show that these are unlicensed and unregulated casinos or sportsbooks operating online in any given jurisdiction and ask them to either register or move on. Other websites earning the ire of the ADG included peer-to-peer gambling site ProphetX and a sportsbook event wagering site called Generiz.

The ADG alleges that these companies are all committing felonies, including money laundering, promotion of gambling, and illegal control of an enterprise. They also caution all residents that they have limited recourse when dealing with these offshore operators regarding complaints or disputes and that recovering any disputed funds is highly unlikely. 

It remains to be seen if this is just the first shot in the beginning of a war on unlicensed sweeps and offshore casino operators or if this was just a warning by ADG not to test them. As a barrage of cease-and-desist letters from state attorneys general goes, this was a bit underwhelming, but it's hard to read if that's a sign we’re just getting warmed up here or if it's a half-hearted swat at a pesky gnat.

If nothing else, Arizona’s cease-and-desist letters serve as a shot across the bow: the freewheeling days of grey market gambling may be numbered.