Maryland Regulators Demand VGW’s Exit, Call for Legal Justification

The Maryland Lottery and Gaming Control Agency has demanded Virtual Gaming Worlds (VGW), the Australian operator behind prominent sweepstakes casino platforms like Chumba Casino and Luckyland Slots, to cease their gaming activities in Maryland immediately. This bold move comes after VGW openly opposed Senate Bill 860, which seeks to ban online sweepstakes casinos in the state.

Cease and Desist: A Clear Message

On March 12, just a day after VGW's lobbyist testified against the bill, Maryland's top regulator, Michael Eaton, issued a clear "cease and desist" directive via email. The agency pointedly highlighted that VGW is illegally operating casino-style games without the necessary state-issued licenses or registrations. Maryland law explicitly permits only mobile sports wagering and fantasy competitions. Online casino gaming, or iGaming, remains strictly prohibited.

Demands for Clarity and Compliance

Eaton’s letter sets a firm deadline of March 27, 2025, urging VGW to confirm if they are currently operating unauthorized gaming activities. If confirmed, VGW is compelled to provide detailed descriptions of each game, sports wagering, or fantasy competition they offer, including relevant links or retail locations.

Moreover, the regulators are demanding a comprehensive legal justification explaining VGW’s interpretation of Maryland law to support the legality of their operations. Non-compliance, as the agency warns, could permanently jeopardize VGW’s chances of obtaining any future gaming licenses or certifications within the state.

Legislative Pressure Intensifies

The agency's timing appears strategic, intensifying pressure just before the House Ways and Means Committee hearing on Senate Bill 860. If VGW ignores the directive, any remaining resistance against the bill's passage is likely to dissipate, effectively cementing regulatory control. Conversely, compliance from VGW would implicitly acknowledge previous illegal activities, potentially triggering legal actions and further cease-and-desist letters in other jurisdictions.

Legal Opinion: A Risky Conundrum

While VGW is no stranger to regulatory scrutiny, this particular demand for a detailed legal opinion is unprecedented and risky. Previously, VGW faced similar pressures in states like Connecticut, Delaware, and Michigan but was never required to openly share the underlying legal rationale for their operations. The increasing skepticism surrounding sweepstakes casinos has been amplified by lawsuits, regulatory actions, and Google's recent reclassification of these platforms as online gambling.

Cascading Effects and Future Implications

VGW faces a tough decision with far-reaching implications. If the company resists the regulatory demands, the likelihood of Senate Bill 860 passing increases dramatically, setting a strong legislative precedent for other states considering similar measures, including New York, New Jersey, Connecticut, Florida, and Mississippi. Conversely, voluntary compliance could encourage more states to impose similar requirements, potentially unsettling the sweepstakes casino industry nationwide.

The Maryland Lottery's bold stance against VGW underscores the growing scrutiny sweepstakes casino operators face, highlighting the critical importance of regulatory compliance and transparency in the evolving iGaming landscape.