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Forbes
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- Forbes
Louisiana Opinion On Sweepstakes Casinos Provides Roadmap For Other State AGs
A recent legal opinion issued by the Louisiana Attorney General could mark a major turning point in how states deal with online sweepstakes casinos. In early July, Louisiana Attorney General Liz Murrill issued a formal legal opinion declaring that online businesses offering 'casino-style' games, such as slot machines, roulette, blackjack, poker and others, which utilize virtual or dual-currencies redeemable for cash or prizes, are operating as illegal gambling businesses under Louisiana law and face criminal and civil enforcement actions. In her legal opinion, Murrill highlighted several characteristics of online sweepstakes casinos that warranted their treatment as illegal gambling. She began by pointing to the pricing structure in which users 'may purchase 'Gold Coins' and receive free 'Sweeps Coins' 'as a bonus,' typically in the same dollar amount as the purchase, which can then be used to play casino games and be redeemed for cash or valuable prizes.' This 1:1 pricing correlation – coupled with the redeemability of Sweeps Coins into cash or valuable prizes on a similar 1:1 basis – indicates that the Gold Coins are merely a 'cover' for the purchase of Sweeps Coins. Murrill also noted that several out-of-state courts addressing online sweepstakes casinos have outlined the elements that are indicative of the 'true purpose' of the online sites being the promotion of illegal gambling. 'These indicators,' she wrote, 'include a casino-like environment, the perpetual duration of the games, the high payout percentages of online casinos, the restrictions on the consumers' ability to redeem prizes, and customers valuing 'sweepstakes entries' more than the product, usually by immediately replenishing sweeps coin balances to continue playing games after running out through unsuccessful play.' In determining that online sweepstakes casinos were illegal gambling businesses, Murrill focused on two of these 'indicators' in particular – the perpetual nature of the real-money games and their casino-like payouts: 'These operations are promoted year-round, are not in promotion of some legitimate business operation, feature jackpots and wagering elements, pay tables, and profit from user participation by selling tokens or credits,' she wrote. 'The sale of these coins along with the chance to win money and the ongoing operation of these platforms amounts to illegal gambling as a business,' Murrill concluded. She added that online sweepstakes casinos are not licensed or regulated and do not offer player protection safeguards, such as adequate age verification, geolocation, or know-your-customer protocols. FEATURED | Frase ByForbes™ Unscramble The Anagram To Reveal The Phrase Pinpoint By Linkedin Guess The Category Queens By Linkedin Crown Each Region Crossclimb By Linkedin Unlock A Trivia Ladder The opinion relies on existing law – both in Louisiana and nationally The opinion was issued in response to a request from Louisiana state senator Rick Edmonds following the Governor's veto of Senate Bill 181, which sought to ban online sweepstakes casinos. Although he vetoed SB 181 after it had been unanimously approved by the legislature, Governor Landry acknowledged the current illegality of these websites by stating, in part: In response to Governor Landry's veto message, the Louisiana Gaming Control Board issued 42 cease-and-desist notices to numerous illegal operators, including several prominent online sweepstakes casino businesses, ordering them to immediately terminate operations in Louisiana and threatening them with further enforcement action if they did not comply. Murrill's opinion – which was issued just two weeks after the flurry of cease-and-desist notices were sent – is notable because it did not depend on new legislation being enacted. It relies solely on existing law, and, in particular, the well-established body of case law addressing perpetual 'casino-style' sweepstakes promotions, encompassing decisions from Alabama, Texas, Pennsylvania, North Dakota, and Ohio. In every one of those cases, the courts found the casino-themed real money sweepstakes games to be illegal gambling. Indeed, as detailed previously in Forbes, every relevant judicial decision (at least 15 by my count) which addresses a 'casino-style' sweepstakes promotion that awarded users free entries to play real money games of chance in an amount commensurate with dollars spent found that the sweepstakes games constituted illegal gambling – even where free entries were available without a product purchase. Notably, five of these decisions were from Texas courts. By contrast, you'd be hard-pressed to find even one judicial decision from this century that has upheld a sweepstakes promotion which incorporates casino-style games of chance. The lesson here is that while legislation is certainly a valuable tool for memorializing the illegality of online sweepstakes casino operations, existing case law already provides state law enforcement officials with the requisite tools for declaring these businesses to be illegal. Factors identified by courts as indicative of a 'gambling' scheme With the vast majority of state legislatures having adjourned for the year, I suspect we will begin seeing more state attorneys generals addressing the legality of online sweepstakes casinos – either by issuing formal legal opinions (building off the analysis of the Louisiana Attorney General) or proceeding more aggressively by instituting civil enforcement actions. One obvious candidate is Texas, especially since its legislature does not reconvene until early 2027 – leaving it unable to enact legislation banning online sweepstakes casinos (as several states have recently done). Another key factor favoring review is that the Louisiana Attorney General opinion relied in part on Texas law to determine that online sweepstakes casinos are illegal – so part of the analysis is already done. With its deep-rooted history of being an anti-gambling state and extensive body of case law addressing casino-themed sweepstakes games, Texas checks every box for attorney general review of the sweepstakes casino business model. A threshold legal issue that must be addressed at the outset — regardless of the jurisdiction — is the element of payment, also known as 'consideration.' For context, many states' anti-gambling laws define an illegal lottery as comprised of three essential elements: prize, chance, and consideration (i.e., payment). Sweepstakes (which are typically random drawings for prizes) possess two of the three characteristics of a lottery: chance and a prize. Therefore, to avoid classification as an illegal lottery, a sweepstakes must not involve any consideration. The approach used in Texas for determining whether consideration is paid for the product or the sweepstakes entries—or both—is the 'primary subject' analysis. Under this framework, consideration will be found where the product purchased to obtain the sweepstakes entries is not the 'primary subject' of the transaction, but rather is 'mere subterfuge' to promote sweepstakes play. As the district court explained in Texas v. Ysleta del Sur Pueblo, 'if entries to a sweepstakes are granted in connection with the purchase of a product, the product must be the 'primary subject of the transaction,' otherwise the payment is made to purchase an entry to win a prize, and the so-called sweepstakes is, in actuality, an illegal lottery.' In making this evaluation, Texas courts have measured the product's value from two perspectives: that of the sweepstakes participants, and the sweepstakes sponsor. Courts which have addressed the legality of sweepstakes casino operations have outlined the elements that are indicative of the 'true purpose' being gambling. These elements include: (1) a 'casino-like' atmosphere; (2) the perpetual duration of the games; (3) high payout percentages; (4) a high degree of correlation between dollars spent and the number of sweepstakes entries received; (5) restrictions on the consumers' ability to redeem prizes; and (6) customers valuing the sweepstakes entries more than the promoted product, among other factors. 1. 'Casino-like' environment Numerous courts have indicated that a 'casino-like' business model is anathema to a finding of a legitimate sweepstakes. As a Pennsylvania federal court observed in Telesweeps of Butler Valley, Inc. v. Kelley, '[f]or Plaintiff to argue that its sweepstakes is not gambling when it works to create a player experience which mimics casino-style games as closely as possible is too much for this Court to accept.' Likewise, in Texas v. Ysleta del sur Pueblo, a Texas federal court concluded that a sweepstakes operator's 'casino-like business model' – with 'rows and rows' of sweepstakes Kiosks 'that look similar to slot machines' – was 'clear and convincing evidence' that the 'true purpose' of the business 'is to 'create a place where people [are] comfortable staying . . . and playing the sweepstakes,' and not to promote a . . . product.' Similarly, in United States v. Davis, the United States Court of Appeals for the Fifth Circuit, applying Texas law, pointed to the 'casino-like atmosphere' of the Internet cafés – 'complete with tinted windows and free food and drink' and a 'a variety of casino-like games available on each computer terminal' – as persuasive evidence that 'the defendants' true purpose for the cafés was to create a place where people would be comfortable staying for a long time, purchasing Internet time and playing the sweepstakes.' Based on this evidence, the Fifth Circuit concluded that 'the main purpose and function' of the business 'was to induce people to play the sweepstakes, and that the Internet time sold by the cafés—albeit at fair market value—was not the primary subject of the transaction, but instead mere subterfuge.' Along the same lines, the Texas Attorney General has declared that the 'nature of the appeal which the business makes to secure the patronage of its customers' is a controlling factor in determining whether a given scheme or business is a prohibited lottery. Here, the 'casino-like' atmosphere and imagery associated with the sweepstakes casino websites, as well as the aggressive online advertising which is carefully crafted to exploit the appeal of gambling and is frequently loaded with images of people holding outsized checks indicating how much money they won gambling on the websites, suggests that the 'true purpose' of the business is to promote sweepstakes play, as opposed to a good or service. New research published by the American Gaming Association confirms this. Among the key findings: 90% of sweepstakes casino users consider the activity to be gambling; 68% say their primary reason for playing is to win real money; and 69% describe sweepstakes casinos as platforms to wager real money. As the California Court of Appeals appropriately observed in Lockyer v. Pacific Gaming Technologies, in referring to a slot machine-style sweepstakes promotion, 'if it looks like a duck, walks like a duck, and sounds like a duck, it is a duck. And so it is with this duck.' 2. Perpetual duration A traditional sweepstakes promotion 'is a limited-term event designed to attract consumer attention to a product or a business, and ordinarily expires after a few weeks or months.' For sweepstakes casinos, on the other hand, the sweepstakes games run perpetually. This distinction has been cited by courts and state attorneys general as a critical factor in determining that a sweepstakes promotion was in fact a guise for illegal gambling. For example, in Barber v. Jefferson County Racing Assoc., Inc., the Alabama Supreme Court found that the perpetual duration of a slot machine-style sweepstakes promotion was indicative of its 'true purpose,' which was to legitimize illegal gambling. As the Barber Court explained, 'the duration of 'promotional sweepstakes occasionally offered by fast food chains, or in connection with candy, sodas, miscellaneous food or other established retail products,' is typically 'limited,' as opposed to the duration of the MegaSweeps, which is indefinite.' Likewise, in a 2001 opinion, the South Carolina Attorney General described perpetual game promotions connected with the sale of two-minute phone cards as 'mere ruses' to avoid state gambling laws since the cards were never sold without the attached game pieces, suggesting that 'the consumer was really buying the opportunity to win a prize.' 'True promotional games, such as those offered by McDonald's and other legitimate business concerns,' the Attorney General observed, 'are always brief or temporary in duration, and the vast majority of the consumer product or service is always sold with no game of chance involved.' More recently, the Louisiana Attorney General pointed to the 'perpetual duration' and 'ongoing nature' of the games as an indication that the 'true purpose' of online sweepstakes casinos was to promote illegal gambling. Based in part on this characteristic, the Louisiana Attorney General concluded that 'online businesses offering casino-style games—purporting to be sweepstakes or social gaming platforms—are operating in violation of Louisiana law.' 3. High Payout Percentages The typical payout percentage for a temporary promotional sweepstakes is 'a trivial share of the revenue earned by the company.' For example, the grand prize for McDonald's annual Monopoly-themed sweepstakes is usually about $1 million, which is a tiny fraction of the billions of dollars that McDonald's earns each year. By contrast, online sweepstakes casinos claim to pay out in prize money between 80-96% of their revenues; notably, slot machines at commercial casinos typically pay out between 80 to 95 percent (depending on the state). The highest courts of two states have pointed to the high payout percentage of a sweepstakes as indicative of a gambling scheme. In Barber, the Alabama Supreme Court noted that the 92% payout rate for the MegaSweeps promotion 'coincides with the industry standard for casino-style slot machines, which 'typically pay back 90% to 98% of all money played. By contrast, the typical payout percentage for a 'temporary promotional sweepstakes' is 'one half of one percent.'' The Barber Court found that 'the payout percentage and duration of the operation are indicative of 'the true purpose of the game,' which is to promote gambling. Likewise, in Midwestern Enterprises, Inc. v. Stenehjem, the North Dakota Supreme Court addressed a telephone card vending machine that dispensed a two-minute telephone card, plus a chance to win up to $500 in cash for every dollar paid. The telephone card vending machine incorporated visual and audio 'gambling features,' and randomly dispensed a chance for cash prizes with each dollar risked, with a pay-out rate of 65%. The North Dakota Supreme Court characterized this 'high payout rate' as 'a distinguishing feature because it goes to the true purpose of the game,' which, again, was to promote gambling. 4. Sweeps Coins correspond nearly 1:1 with dollars spent The pricing structure also makes clear that the primary subject of the transaction is to facilitate the sale of Sweeps Coins. While players can receive a limited number of Sweeps Coins for free through mail-ins, giveaways and other promotions, by far the most common way to obtain Sweeps Coins beyond a nominal amount is by purchasing Gold Coins. The more Gold Coins that a player purchases, the more Sweeps Coins the player also receives. Critically, the number of Sweeps Coins received as a 'free' bonus corresponds with the amount of real money spent. As the Louisiana Attorney General noted, there is essentially a 1:1 correlation between the number of dollars spent and the number of Sweeps Coins provided in each purchase. So, for example, if someone buys a coin bundle for $30, they will typically receive 30 Sweeps Coins in addition to thousands of Gold Coins. The 1:1 equivalency between dollars spent and Sweeps Coins received — coupled with their redeemability into dollars on a 1:1 basis following successful play — indicates that, at least from the customers' perspective, they are paying in large part to acquire Sweeps Coins to engage in real-money gambling. This is the same artifice that was used by 'Internet sweepstakes cafés' over a decade ago to offer real money casino-style gaming under the guise of a sweepstakes promotion. These gambling operations – often located in suburban strip malls – would claim to sell Internet access time to consumers and, as part of an alleged 'sweepstakes promotion,' consumers would receive a corresponding number of 'sweepstakes points' for each dollar spent on the service. These 'points' – which were redeemable for cash – would then be used to wager on casino-style games that were played on computer terminals provided at the Internet cafés. Courts throughout the country have repeatedly determined that such tactics were an obvious pretext and cover for illegal gambling. For example, in Telesweeps of Butler Valley, Inc. v. Kelley, a Pennsylvania federal district court held that the purchase of a long-distance telephone card that comes with a commensurate number of free entries to participate in a 'casino-style' sweepstakes constituted 'indirect consideration' to participate in the sweepstakes, even though (like here) no purchase was necessary and several alternative methods of free entry were available. In rejecting the defendant's argument that the customer was simply paying for long-distance telephone calling minutes and not the sweepstakes entries, the Court declared that 'plaintiff's attempt to separate the consideration from the chance to win by inserting a step between the two elements is clever, but it merely elevates form over substance. At bottom, what Telesweeps is doing constitutes gambling.' A similar sweepstakes scheme was addressed by an Ohio appellate court in Cleveland v. Thorne, where patrons received 100 sweepstakes points for every $1 spent on network access time and could use those points to play simulated 'casino-style' games at the defendants' internet sweepstakes cafés, and, following successful play, could exchange their 'winning points' for cash at a value of one cent per point. On appeal following a criminal conviction for operating a gambling house in violation of Ohio's anti-gambling laws, the defendants argued that the network access time was a 'valuable product that patrons paid for and received' and 'the sweepstakes points were given free as a promotion and had no actual value.' In affirming the defendants' convictions, the Ohio Court of Appeals memorably stated that 'the justice system is not some lumbering oaf who must ignore the patently obvious gambling scheme apparent here simply because of a contrived separation between consideration and the scheme of chance.' The Ohio appellate court declared that '[t]he law in this arena serves no purpose to elevate form to such a high degree that the nature of the transaction should be ignored,' adding that 'there is no justification for ignoring the nature of the transaction simply because the system is designed in such a way as to artificially isolate one part of the illegal transaction from another. The justice system is not so blinded by chicanery.' Online sweepstakes casinos 'are utilizing the same concept,' the Louisiana Attorney General wrote. Just like the Internet sweepstakes cafés found to be illegal gambling businesses in Telesweeps and Thorne, online sweepstakes casinos artificially separate the consideration from the chance to win real money by claiming that the payment is for a 'product' (i.e., Gold Coins) and the sweepstakes entries (i.e., Sweeps Coins) are 'free,' while conveniently providing the purchaser with an allotment of Sweeps Coins that is equivalent in value to the amount of money spent. The nearly 1:1 ratio of Sweeps Coins to dollars spent sends a clear and unmistakable message to consumers interested in real-money casino gambling – i.e., that they can just ignore the Gold Coins and focus instead on the Sweeps Coins allotment (in essence, paying $30 for 30 Sweeps Coins). As to those customers, the 'controlling inducement' for the transaction is clearly 'the lure of an uncertain prize' – a characteristic which the Texas Attorney General has declared is synonymous with an illegal lottery. 5. Restrictions on the ability to redeem prizes Conditions designed to keep customers playing longer are indicative that the true purpose of the sweepstakes is to promote gambling, as opposed to a good or service. Unlike traditional sweepstakes where prizes can be claimed immediately, most online sweepstakes casinos have a 'minimum permitted redemption' threshold that limits a user's ability to redeem prizes unless their Sweeps Coins balance is above a certain amount. In most cases, the withdrawal threshold is 100 Sweeps Coins. Thus, if a customer never reaches 100 Sweeps Coins won, they can never redeem anything. This causes consumers to continue playing and eventually lose their remaining Sweeps Coins balance, leading them to purchase more Gold Coin packages just to get an additional allotment of 'free' Sweeps Coins in order to continue playing. This is further compounded by a 'playthrough requirement,' which refers to the number of times that a user must play through his or her allotted Sweeps Coins before they become eligible for redemption. For example, if a user receives 100 Sweeps Coins and those Sweeps Coins have a playthrough requirement multiplier of 2x, a user must play games totaling 200 Sweeps Coins prior to those coins being eligible for redemption as a prize. Many online sites have a 2x or greater playthrough requirement multiplier, with the discretion to increase the multiplier up to a maximum of 20x. This requires users to continue playing – even after a successful first spin – and increases the likelihood that they will gamble – and lose – all of their remaining Sweeps Coins, leading them to purchase even more Gold Coins (just to get an additional allotment of 'free' Sweeps Coins as a bonus) in an effort to try to satisfy both the playthrough requirement and a restarted minimum permitted redemption threshold. The Fifth Circuit has declared that conditions designed to keep patrons playing longer are indicative of the 'true purpose' of the transaction being the promotion of the sweepstakes, not the purported 'product' or 'service.' In United States v. Davis, the Fifth Circuit, applying Texas law, found the evidence established that 'the defendants' true purpose for the cafés was to create a place where people would be comfortable staying for a long time, purchasing Internet time and playing the sweepstakes' in a 'casino-like atmosphere.' Thus, the Fifth Circuit concluded that 'the main purpose and function' of the business 'was to induce people to play the sweepstakes, and that the Internet time sold by the cafés—albeit at fair market value—was not the primary subject of the transaction, but instead mere subterfuge.' 6. Customers value sweepstakes entries more than the product The degree to which customers valued the sweepstakes entries over the promoted product is also indicative of whether the true purpose of the transaction is to promote sweepstakes play. In United States v. Davis, the Fifth Circuit recited the following evidence as indicia that consideration fueled the sweepstakes: A review of customers' account activity and game-play history can shed important light on this factor. There are two obvious time horizons at which the customers' account activity and game play should be assessed: (1) following the customer's initial purchase of Gold Coins; and (2) when Sweeps Coins balances are depleted following unsuccessful play. First, as to customers who purchased Gold Coins and received an allotment of 'free' Sweeps Coins as a bonus, to what extent are they playing the Sweeps Coins over the Gold Coins? If a significant percentage of purchasing customers continually bypass their ample supply of Gold Coins in favor of playing Sweeps Coins, that would be a clear indication that the Sweeps Coins, and not the supposedly promoted product (Gold Coins), are the 'primary subject' of the transaction. For example, in People ex rel. Green v. Grewal, the California Supreme Court found that the element of consideration was satisfied by evidence showing that the customers 'who bought Internet time seemed to spend more time playing the games than using the Internet' and that 'two-thirds of the purchased telephone time' was never used. Based on this disparity of sweepstakes play to actual product use, the California Supreme Court concluded that the internet café's customers were 'clearly paying, at least in part, and, it appears in large part, for the opportunity to play the casino-style sweepstakes games and win cash prizes.' Second — and perhaps even more telling — what typically happens when customers with an abundance of Gold Coins in their online accounts run out of Sweeps Coins following unsuccessful sweepstakes play? Do they go back to their stockpile of Gold Coins and switch to the social casino games (where such coins cannot be redeemed for cash or any prizes) purely for the entertainment value? Or do they seek to immediately replenish their Sweeps Coins balances – and continue playing real money casino-style games – by purchasing additional Gold Coin packages that are bundled with a 'bonus' allotment of 'free' Sweeps Coins? If a significant percentage of users opted to replenish their depleted Sweeps Coin balances by purchasing additional Gold Coin packages – despite already having a large cache of Gold Coins in their online accounts (even relatively small purchases can garner 'hundreds of thousands' of Gold Coins) – that would be compelling evidence that users valued the sweepstakes entries (i.e., Sweeps Coins) more than the promoted product (i.e., Gold Coins), justifying a finding that the Sweeps Coins were the 'primary subject' of the transaction. There is strong anecdotal evidence that online sweepstakes casino spenders are far more interested in the 'free' Sweeps Coins included as a 'bonus' when they purchase Gold Coin packages. An online survey conducted by the American Gaming Association in June 2025 found that, among players who spend money on these platforms, 67% said that they were 'primarily interested' in obtaining the Sweeps Coins rather than Gold Coins, emphasizing the appeal of the virtual tokens with redeemable cash value. Of these spenders, 76% said Sweeps Coins were either 'very' or 'extremely important' in deciding whether to buy a package. While this type of account-level review may ultimately require some degree of fact-gathering and investigation – in contrast to other above-described factors that are evident on their face – these details are within the possession and control of the sweepstakes companies and can readily be subpoenaed and/or demanded through the civil litigation discovery process. 7. Alternative methods of free entry do not negate consideration Sweepstakes laws do not allow operators to bypass strict anti-gambling laws merely by offering free ways to enter. As several Texas courts have recognized, 'the mere pretense of free prizes designed to evade the law, [will] not negate the element of consideration.' For example, in Jester, the Texas Court of Appeals found consideration was present in a sweepstakes even though players could obtain free entries by sending in a postage-paid request form. The Court explained that, notwithstanding the availability of free entries: Thus, where the 'primary subject of the transaction' is to promote sweepstakes play, the existence of alternative methods of free entry will not negate the element of consideration. As discussed above, the following characteristics indicate that the online sites' true purpose is to promote sweepstakes play: (1) the 'casino-themed' environment which allows users to readily switch between non-redeemable 'standard mode' and real money 'promotional sweepstakes mode,' along with information about the user's Sweeps Coins balance constantly displayed near the top of the screen; (2) the perpetual duration of the real-money games; (3) the high payout percentages; (4) the nearly 1:1 correlation between dollars spent and Sweeps Coins received; (5) conditions designed to ensure that customers spend more time playing the real-money games; and (6) customers valuing Sweeps Coins more than the promoted product. In addition, the alternative methods of free entry utilized by many online sweepstakes casino websites do not appear to comply with Texas law, which requires, at a minimum, that: (i) free entries be 'readily and conveniently available'; (ii) the number of free entries offered to non-paying customers cannot be 'nominal'; and (iii) paid entries and free entries must be treated equally. The 'overriding issue,' according to the Texas Attorney General, is whether 'customers' and 'non-customers' are treated equally 'in every respect.' If 'any character of favoritism' is shown to paying entrants, the scheme will be treated as a prohibited lottery. Online sweepstakes casinos treat paying customers much more favorably than non-paying customers in several respects. First, there is clear preferential treatment in the awarding of Sweeps Coins. While most online platforms offer several ways to get free entries without requiring a product purchase – such as by mailing a postcard to a P.O. Box address – the number of free entries awarded to non-paying customers is typically a very low amount – usually no more than 5 Sweeps Coins. By contrast, there is no limit to the number of Sweeps Coins that paying customers can obtain. The more Gold Coins that a player purchases, the more Sweeps Coins the player also receives. So, while a paying customer willing to spend $100 on a coin bundle will typically receive around 100 Sweeps Coins as a bonus, the non-paying customer who mails in a postcard is capped at 5 Sweeps Coins – a nominal amount. A second way in which online sweepstakes casinos treat non-paying customers less favorably than paying customers is through the often-lengthy delays that are experienced in claiming a nominal amount of 'free' Sweeps Coins through the mail. Under Texas law, free sweepstakes entries must be 'readily and conveniently available.' The process for obtaining free entries through the mail – one of the most common alternative methods of free entry – is anything but. While paying customers immediately have their accounts credited with Sweeps Coins when they purchase a coin package, non-paying customers who submit a mail-in postcard to a designated Post Office Box address typically have to wait several weeks, and sometimes months, before their accounts are credited with a nominal amount of Sweeps Coins. 8. Legitimacy of the product is doubtful Finally, in addition to all the other characteristics indicating that online sweepstakes casino websites are illegal gambling businesses (i.e., the clear presence of consideration, the casino-like business model, the perpetual nature of the sweepstakes games, and casino-like payouts), there are serious questions over whether the valueless virtual currency promoted by the real-money casino games are even legitimate products for purposes of a sweepstakes promotion. In California, for example, virtual currency is not a bona fide consumer good. Every California court that has considered the issue has held that virtual currency is not a consumer 'good' or 'service' because it is an intangible asset falling outside the scope of the Consumer Legal Remedies Act. Thus, the virtual 'Gold Coins' that are being touted as the product promoted by the sweepstakes games are not even considered bona fide products under California law. Likewise, under Texas law, a promotional sweepstakes must be connected to the purchase of a 'legitimate product.' Products having 'little or no value' are viewed with skepticism by Texas authorities. As the Texas Attorney General explained in a 1997 legal opinion: '[i]f a product of little or no value is being sold in conjunction with a sweepstakes ticket, the consideration may be deemed to have been paid for the privilege of entering the sweepstakes.' Further, Texas law also requires that 'the payment must be made for a non-gaming product; the product cannot be a sham existing to disguise what is actually a payment to the play the game.' Any claim of product legitimacy is belied by the fact that the virtual 'Gold Coins' do not have any monetary value and cannot under any circumstances be redeemed for cash or prizes. Further, the only 'product' offered are casino games – there is no separate 'non-gaming' line of business being promoted by these companies. Unlike legitimate sweepstakes and rewards loyalty programs, such as those offered by McDonald's or Starbucks, online sweepstakes casinos 'are not offered in furtherance of a legitimate business of goods,' Louisiana Attorney General Liz Murrill concluded. The 'persistent, predatory and profit-driven' casino-style sweepstakes platforms bear no resemblance to those legitimate promotions, she added. State AGs are the next legal frontier in the battle over sweeps Murrill's opinion is just the latest example of state attorney general engagement on the issue of online sweepstakes casinos. Earlier this year, New York Attorney General Letitia James sent cease-and-desist letters to 26 online sweepstakes casino operators, ordering them to 'immediately cease all prohibited gambling activity . . . in New York.' The net result – every recipient voluntarily terminated operations in New York. In West Virginia, State Attorney General John McCuskey issued 47 subpoenas to many of the same companies. Although none have responded formally, more than 20 platforms have since withdrawn from West Virginia. What does that tell you? That these companies will back down when challenged by state officials. Over the last 18 months, ten states – New York, New Jersey, Pennsylvania, Michigan, Delaware, Connecticut, Louisiana, Maryland, Mississippi, and Arizona – have collectively sent over 100 cease-and-desist letters to the operators of dozens of sweepstakes casino websites. Notably, not a single lawsuit was filed challenging the validity of any of those letters. Contrast that with the recent C&D letters that were sent to prediction market platform Kalshi, which responded in nearly every instance by filing a lawsuit against the state issuing the demand. To put it in proper perspective, one company (Kalshi) challenged every single cease-and-desist letter whenever the issuing state demanded immediate compliance. By contrast, not a single one of the dozens of sweepstakes casino platforms which received over 100 cease-and-desist letters in the aggregate were willing to challenge even one of those demands in court. The failure of the sweeps industry to challenge even so much as one cease-and-desist letter is almost tantamount to an admission of illegality. What were they so afraid of? Apparently, the law. Which is one reason why attorney general opinions can be so extraordinarily helpful. Unlike cease-and-desist letters which are directed only against specific companies, a legal opinion from a state attorney general has much broader application, and, in contrast to the legislative process, does not require a formal process or notice before an opinion is issued. Importantly, it can serve as legal precedent and provide the foundation for future civil and criminal enforcement actions against companies which operate in defiance of the opinion. And the timing could not be more perfect. Earlier this week, a coalition of 50 state attorneys general submitted an unprecedented letter to U.S. Attorney General Pamela Bondi requesting the federal government's assistance in curbing 'the rampant spread of illegal offshore gaming operations across the United States.' Specifically, the State AGs asked Bondi to 'deploy robust legal tools' available under federal law, specifically mentioning the Unlawful Internet Gambling Enforcement Act and the Illegal Gambling Business Act, which empower the DOJ to block access to illegal websites and 'seize assets—including servers, domains, and proceeds—that illegal gambling operations use.' However, each of these federal anti-gambling statutes is triggered by a violation of state law. In other words, to prove a violation of the IGBA (which allows seizure of the domains), the DOJ would have to demonstrate that there was a violation of state anti-gambling laws. The DOJ's federal case would be aided immeasurably by a state attorney general formal legal opinion declaring that the online sweepstakes casino business model is illegal under state law. That would certainly go a long way towards helping the Justice Department help the States. And if 'collaboration' is the goal, this is the best way for State AGs to set the table for the feds. But state attorneys general should also pursue civil enforcement remedies under state law. As I have previously written in Forbes, the most effective and efficient way to combat the proliferation of online sweepstakes casinos may be through the vast civil enforcement powers of state attorneys general, who are typically authorized under state law to seek wide-ranging remedies such as injunctive relief, restitution, disgorgement of profits, sequestration of assets, and civil penalties to address illegal activity. Additionally, State AGs can pursue action against other actors who materially assist, aid, abet, or promote illegal gambling operations. Unlike legislation, which is usually forward-looking, civil enforcement actions can look back and address prior misconduct. Without question, an injunction requiring the illegal operator to cease doing business in the state, combined with the forced payment of tens (or even hundreds) of millions of dollars to injured consumers and state treasury in the form of restitution and civil penalties, can serve as a powerful deterrent to other companies violating state gambling laws. It can accomplish in just one case what dozens of cease-and-desist orders cannot possibly achieve in what is fast becoming an endless game of 'whack-a-mole.' Either way, Murrill's opinion – the first one issued by any state attorney general on the subject – will likely prompt closer examination of the issue by other State AG's offices.
CBS News
6 minutes ago
- CBS News
Butter made from carbon tastes like the real thing, gets backing from Bill Gates
A company in Batavia, Illinois is making butter in a way you've never seen before. No animals, no plants, no oils; this butter is made from carbon. The sustainability-focused approach has the blessing and backing of Bill Gates. It looks, smells and tastes like the butter we all know, but it's made without the farmland, fertilizers or emissions tied to the typical process. This unprecedented process is happening at the facilities of Savor in an industrial park in the suburbs west of Chicago. "So you're using this gas right now to cook your food and we're proposing that we would like to first make your food with— with that gas," said Kathleen Alexander, co-founder and CEO of Savor. The company's pioneering tech uses carbon and hydrogen to make sticks of butter that anyone would recognize. "This is pretty novel, to be able to make food that looks and tastes and feels exactly like dairy butter, but with no agriculture whatsoever," said Jordan Beiden-Charles, food scientist for Savor. And without a long ingredient list the average person can't pronounce. "It's really just our fat, some water, a little bit of lecithin as an emulsifier, and some natural flavor and color," Beiden-Charles said. This is how it works: Fats are made up of carbon and hydrogen chains. The goal is to replicate those chains without animals or plants. And they did it. To put it in simple terms, Savor says they take carbon dioxide from the air and hydrogen from water, heat them up, oxidize them and get a final result that looks like candle wax but is in fact fat molecules like those in beef, cheese or vegetable oils. The entire process releases zero greenhouse gases, uses no farmland to feed cows, and despite its industrial appearance, has a significantly smaller footprint. "In addition to the carbon footprint being much lower for a process like this, right, the land footprint is, like, a thousand times lower than what you need in traditional agriculture," Alexander said. And the most important question: how does it taste? The answer is surprisingly like the butter we know and love. The company also touts that they do not use any palm oil in the butter, and palm oil is a significant contributor to deforestation and climate change. Of the 51 billion tons of greenhouse gases emitted every year, 7% is from the production of fats and oils from animals and plants, which Savor says makes their process the most climate-friendly option. Right now, the company is working directly with restaurants, bakeries and food suppliers. They are releasing chocolates made with their butter in time for the 2025 holiday season. They expect for the average consumer to be able to buy them in the near future. "Savor Butter, in either its current manifestation or with our partners, we expect that to be on the shelves kind of more like around 2027," Alexander said. The teams in Batavia and their home lab base in San Jose, California, are backed by billionaire Gates who wrote in his blog, "The idea of switching to lab-made fats and oils may seem strange at first. But their potential to significantly reduce our carbon footprint is immense." The company believes butter can make a difference. "This is really about how we feed our species and heal our planet at the same time," Alexander said.
New York Times
6 minutes ago
- New York Times
Mindful of painful history, Red Sox make Roman Anthony the one who didn't get away
BOSTON – Roman Anthony hurried through an otherwise empty clubhouse. A custom suit hung in his locker. This wasn't a typical Wednesday for a franchise that's become well aware of the cost that comes with letting homegrown stars get away. Ninety minutes before first pitch – when Anthony is usually just finishing up batting practice – he sat in that navy blue suit between Red Sox CEO Sam Kennedy and chief baseball officer Craig Breslow, the latest recipient of a long-term contract extension in Boston. Anthony signed an eight-year, $130 million deal, the largest for any player on the team with fewer than 150 at-bats. Laden with escalators, a league source said, the deal can reach a total value of $230.2 million. Advertisement 'When the offer came through, it was something that I wanted to move quick on,' Anthony said with teammates, coaches, family, front office members and ownership, including team owner John Henry, packed into the press conference room. 'There was no doubt that this is where I wanted to play baseball for a long time.' The Red Sox were cognizant of their botched negotiations with homegrown players. Not signing Mookie Betts to a long-term deal is something that will hang over the club for years to come. When the opportunity presented itself to secure Anthony at an unusual time in the season, they made it a priority. 'In the past, when we haven't signed homegrown players, it's hurt,' Kennedy said. 'We haven't found a way to a deal. So thanks to the Bres for being so aggressive (on Anthony).' Anthony, 21, has the potential to be the next homegrown franchise cornerstone. He will earn $2 million next season and $29 million in his final year of the deal, with a $30 million team option in 2034, according to a source. He'll earn an extra $1 million this season if he finishes first or second in Rookie of the Year voting. The deal includes escalators for top-10 finishes in MVP voting, including $2 million if he wins. He'll earn an extra $200,000 for any year he's named an All-Star. Anthony would have become a free agent after 2031; now he's secured through at least 2033 and potentially 2034. The Red Sox were the first to reach out to Anthony's camp shortly after the trade deadline, a league source noted. During a quiet period days after the trade deadline, Breslow saw a window to re-engage and jumped at it. Anthony's camp knew his value. The top prospect in baseball has hardly struggled at all since his debut on June 9. His camp knew Rookie of the Year was in play and that he held future All-Star and MVP potential. While the Red Sox had signed Kristian Campbell for six years, $60 million earlier this season and Ceddanne Rafaela for eight years, $50 million last year, Anthony's agents were adamant about a much larger deal. Advertisement Initial contract talks in spring training were exploratory, according to a source, and did not come close to any real negotiations. This second round of talks became serious quickly and Anthony expressed a desire to remain in Boston. 'Back in the spring, I hadn't had any experience playing here yet,' Anthony said. 'I didn't really know what to expect yet. It was just more wanting to be here and getting a feel for the everyday lifestyle here…when I got to experience it, even being just 150 at-bats in, I can tell this is where I want to be. There's no doubt.' In roughly 20 months leading the Red Sox, Breslow has made a priority of securing several players to long-term deals including Rafaela and Brayan Bello last season and Garrett Crochet and Campbell this year. But all of those deals came in spring training or right at the start of the season. Two months after trading Rafael Devers, freeing up $254 million in salary, the Red Sox reinvested some of that money in Anthony. Though Breslow said the moves were 'largely independent,' the signing came on the heels of a trade deadline in which the club didn't take on significant salary. 'I guess the beauty of the trade deadline is that it is a true, rigid deadline,' Breslow said. 'Once it passes, we can comfortably shift our priorities to other things. We wanted to kind of strike up these conversations immediately.' Breslow described a number of 'spirited and passionate' conversations he and the front office had with Anthony's group about the player's potential future earnings, particularly in regards to his current Rookie of the Year status. If Anthony won the award before signing the deal, he would have gained an extra year of service time, allowing him to reach free agency sooner. The Red Sox needed to add a similar provision to the deal. Advertisement 'I think it clearly didn't become this prohibitive element or factor, but it was something that both sides needed to get comfortable with in terms of how we were going to address it,' Breslow said. 'It's real. We can't ignore it. But at the same time, the overriding overarching themes here, where Roman wants to be a Red Sox deep into the future, and we want Roman to be a Red Sox deep into the future.' One close comparison that was likely used in negotiations is Arizona's Corbin Carroll. Carroll signed an eight-year, $111 million deal ahead of the 2023 season, before he went on to win NL Rookie of the Year. Carroll had compiled 1.4 fWAR in 32 games at the time he signed the deal; Anthony had a 1.6 fWAR in 46 games at time of his deal. Less than two months into his major-league career, Anthony hasn't felt overwhelmed. He isn't surprised with how he's performed, carrying a quiet confidence that's neither boastful nor cocky. He knows how good he is; the escalators give him a chance to prove it. 'For me, it was a deal that was obviously more than enough for me and for my family and a place that I want to be,' he said. 'Those escalators just give me a chance to continue to grind every day and help this team win and be the best version of myself that I can be each and every day.' Breslow had high praise for Anthony's impact in a short amount of time on one of the more exciting Red Sox teams in the past few years. 'I think it's special. I think it's remarkable,' he said of Anthony's impact on the team. 'I'm not sure that there's a metric that we should look at uniquely and believe that it perfectly captures the impact that he's had. 'If you look at the success that the team has enjoyed, that kind of lines up almost perfectly with his debut, then you start to see a clearer picture of the impact that he's had.' Now Anthony has a chance to impact the club for the better part of the next decade. (Top photo of Roman Anthony: Brian Fluharty / Getty Images) Spot the pattern. Connect the terms Find the hidden link between sports terms Play today's puzzle
