NCLGS Reveals Model Legislation for iGaming which Proposes Ban on Sweepstakes

By Jerry Smith Staff Writer Updated: 12/04/2024

Jerry Smith Staff Writer See Full Bio

Jerry’s greatest advantage is his extensive experience on the casino floor. His time as a casino manager taught him everything about what makes a player tick. Besides being a skilled poker player, he has deep knowledge of all live table games and gambling regulations in the US.

Twitter X

NCLGS Reveals Model Legislation for iGaming

A draft Model Internet Gaming Act (MIGA) has been released by The National Council of Legislators from Gambling States. It is aimed at streamlining online gambling regulations across the United States. The framework is open to the public for comments until 31 December 2024. It hopes to provide more consistency among states regarding iGaming legalization and address other concerns.

The Proposal

The proposal to ban sweepstakes games comes during an increased pushback against the controversial sweepstakes sector of gambling. Many have labelled sweepstakes as illegal gambling, and the controversy around the matter continues.

The NCLGS has said that the model legislation is set up to establish an effective, comprehensive and efficient regulatory framework. “The regulatory provisions are intended to extend strict regulation and oversight over all aspects of internet gaming operations”, the body stated.

Recommended Tax Rate

The model recommends a tax rate of between 15 and 25% for online gaming, noting there will be an average of 19% across the US. The framework also suggests that total deposits for an individual player in a 24-hour period should not exceed $20,000. Furthermore, online sweepstakes casino games will be outlawed.

The NCLGS draft says that any person or entity found in violation of this section shall be subject to a fine of anywhere between $10,000 and $100,000 for each violation and subject to potential loss of gaming licence. The NCLGS believes that repeat offenders should face up to two years in jail.

NCLGS president, Shawn Fluharty said,

My hope is that by bringing together regulators, legislators and industry stakeholders to provide their expertise for this model legislation, it will be a catalyst in producing public policy that will benefit states for generations to come.

Other Important Factors of The Legislation

In addition to the sweepstakes ban, the legislation also emphasizes responsible gambling initiatives, which include creating a player health program and requiring operators to incorporate responsible gambling. Stronger anti-money laundering and know-your-customer protocols are also included.

The NCLGS will discuss the draft at its winter meeting in New Orleans on 14 December 2024, but a vote on adoption is expected in early 2025 to allow for the full public comment period to take place.  

This regulatory framework may be a useful tool for consideration as states embrace the vast potential of internet gaming,

the NCLGS said in a statement, also adding that the final version could influence iGaming legislation filed in 2025.  

The NCLGS hopes the framework will create a way for a more unified and responsible iGaming industry in the US. This will balance economic benefits with consumer protections and regulatory oversight.