Maryland Orders VGW to Shut Down, Seeks Legal Rationale from Company
Maryland's gaming authority is taking decisive action against Virtual Gaming Worlds (VGW), the Australian-based operator behind popular sweepstakes casinos Chumba Casino and Luckyland Slots. Recently, the Maryland Lottery and Gaming Control Agency sent a cease-and-desist letter to VGW, explicitly stating that the company is operating without the required legal authorization.
The letter, sent by Managing Director Michael Eaton on March 12th, highlights that the only permissible online gaming activities in Maryland are sports wagering and fantasy competitions, both of which necessitate state-issued licenses or agency registration. The agency clearly states that VGW lacks any such credentials.
Details of the Regulatory Demand
Maryland authorities have given VGW until March 27, 2025, to confirm if they are still providing any online gaming services within the state. Should VGW confirm its continued operations, it must submit detailed information about each gaming offering, including casino games, sports wagering, and fantasy competitions. Moreover, the regulator demands the company to produce any legal analysis or opinion affirming their activities' legality under Maryland law.
The agency's directive also explicitly requests VGW to acknowledge its intention to cease operations within ten days of receiving the letter, warning that failure to comply could jeopardize VGW’s ability to secure future licenses or registrations in Maryland.
Legal and Legislative Pressure Mounts
The timing of this cease-and-desist notice is particularly significant, arriving just one day following VGW's opposition testimony to Senate Bill 860, which seeks to ban online sweepstakes casinos statewide. With the bill having already passed unanimously in the Senate, the regulatory ultimatum places VGW in a strategic bind. Non-compliance could negatively influence Maryland lawmakers' perceptions, potentially facilitating the bill's passage. Conversely, compliance would imply an admission of previous unlawful operations, potentially setting a troubling precedent for the company in other jurisdictions.
The Broader Impact on VGW and Industry
This isn't VGW's first regulatory confrontation. Similar cease-and-desist letters from states like Connecticut, Delaware, and Michigan indicate a broader skepticism about the legality of sweepstakes casinos. Notably, Maryland’s request for a detailed legal opinion backing VGW's sweepstakes model represents a novel regulatory approach, intensifying the scrutiny faced by sweepstakes casino operators.
Given the existence of multiple private lawsuits, Google’s classification of sweepstakes casinos as online gambling, and recent criminal charges against a major operator in Connecticut, VGW faces significant legal and reputational risks. Providing Maryland regulators with a legal rationale could inadvertently bolster litigation efforts against VGW, both within Maryland and elsewhere.
A Difficult Decision Looms
VGW faces a critical decision in the coming days. Resisting Maryland's demands may essentially guarantee the passage of Senate Bill 860, potentially influencing legislative action in other states like New York, Florida, and Mississippi, which are actively considering similar bans.
Alternatively, voluntary withdrawal from Maryland could embolden additional states to enforce similar regulatory actions against VGW and other sweepstakes operators. Regardless of the choice, the Maryland Lottery and Gaming Control Agency’s strategic move has placed VGW in a precarious legal and operational position, making this cease-and-desist order a significant turning point for the sweepstakes casino industry.