Maryland Lottery claims sweeps sites are just as illegal as offshore casinos
Maryland Lottery and Gaming Control Agency (MLGCA) officials testified at a legislative committee hearing on Wednesday that the state needs to ban sweepstakes casinos and other illegal online gaming operators to close loopholes in the system.
MLGCA Director John Martin told the Senate Budget and Taxation Committee during a hearing for Senate Bill 0112 that while the regulator can issue cease-and-desist letters to operators it deems to be offering illegal online gaming, online gaming is growing exponentially in Maryland because of what he called “ambiguity and loopholes in existing statutes.”
“This legislation is intended to eliminate that ambiguity and close any loopholes,” he said.
MLGCA Director of Legislation and Policy Jennifer Beskid stated that the lottery considers any gaming site outside of the state’s 12 licensed mobile sportsbooks or 14 licensed DFS operators to be illegal under the terms of the bill, specifically citing sweepstakes as an example. Wednesday’s discussion seemed to conflate online sweepstakes gaming with black-market and offshore online casinos and sportsbooks.
More than an anti-sweeps bills
SB 0112 would ban not only sweeps but all “interactive games,” defined within as casino-style, sports wagering-style or lottery-style games that utilize multiple currency systems of payment and allow players to exchange those currencies for any prize or award or cash or cash equivalents. It would not prohibit games that solely award non-cash prizes to customers.
Martin noted that six states, including California, New York and New Jersey, passed legislation last year to ban online sweeps, and pointed to nine others, including Florida, Indiana and Tennessee, that have introduced bills in 2026 aimed at stamping out unlicensed online gaming.
“Clarifying the language and statute to define illegal games as interactive games expressly covers online gaming activities,” he said. “Prohibiting the operation of interactive games in Maryland and including criminal penalties provides an opportunity for the agency to collaborate with law enforcement partners. Illegal operators do not register their businesses in Maryland.”
“We know they’re offshore, we know they’re outside of the United States, but there are some also operating within the U.S.,” added Beskid. “They’re everywhere.”
Lottery gets one-third compliance rate from C&Ds
Martin told the committee that his agency tried to force the issue by sending out 75 cease-and-desist letters, and that it received a roughly 33% success rate in getting the recipients to leave Maryland.
“On a national basis, that’s pretty good,” he suggested. “But there are significantly more bad actors out there in the marketplace.” He did not clarify whether those C&Ds were sent only to sweeps operators or to all categories of online gaming that the lottery deems illegal.
MLGCA says if sweeps want regulation, they should seek licensure
The Social Gaming Leadership Alliance (SGLA) testified against the bill, stating their case that the online games they now label “Social Plus” are legitimate offerings with consumer protections and a way to play without real money. SGLA Managing Director Sean Ostrow warned that banning the vertical would lead to “law-abiding” operators exiting the state but “illegal” operators sticking around.
“The SGLA agrees this bad behavior must be stopped, but the way to do that is through regulation, not a ban,” he stressed. “We are proposing an amendment that will bring industry-wide regulation to Social Plus games.”
“You’re sending cease-and-desist orders to Social Plus operators, while Social Plus operators are just video game companies that are using a marketing promotion of sweepstakes,” argued VGW Executive Product Advisor Derek Brinkman. “So, there’s clearly a disconnect in what your perception of this is. If you want a different regulatory framework to go around our business, we’re open to having that conversation.”
Sen. Cory McCray asked the lottery agency representatives whether it has considered welcoming operators like VGW who urge regulation rather than prohibition.
“This is a pretty direct response, and I don’t mean it to sound insolent in any way, shape or form,” replied Beskid. “But, if they want to be able to offer services in Maryland, they can apply for licensure through the agency and the Maryland Lottery and Gaming Control Commission, and they would have to meet the criteria that’s established in the state government article.”
No vote was taken on the bill during Wednesday’s hearing. The cross-filed House version, HB 0295, is scheduled for a hearing next week.
https://sbcamericas.com/2026/01/29/maryland-lottery-sweepstake-bill-debate/#:~:text=Maryland%20Lottery%20and%20Gaming%20Control,close%20loopholes%20in%20the%20system.