Sweepstakes Operator VGW Leaving New York as Regulatory Bill Gains Steam

Sweepstakes gaming company VGS Holdings Limited announced it will pull out of the New York market this summer.

“We can confirm that following careful consideration, we’ve informed players of a decision to phase out Promotional Play (sweepstakes promotions) in the state of New York,” a VGW spokesperson said.

The company operates brands such as Chumba Casino, Luckyland Slots, and Global Poker.

Gone by fall

While VGW is imminently closing shop in the Big Apple, its customers can still take advantage of its offerings until the summer.

“Our valued players in New York will still be able to enjoy all their favorite free-to-play games using Gold Coins, and we are 100 percent focused on ensuring players are fully informed about the changes, and that this transition is as smooth and seamless as possible,” a company spokesperson said.

VGW will begin the exit process on June 2, from which point on customers will not be able to collect Sweeps Coins. Players will then be given one month to use their sweeps coins to complete withdrawal requests before their accounts are frozen on July 2.

VGW will completely shut down its New York sweepstakes operations on August 1.

Free-to-play games will remain.

“We understand this is an adjustment after many years and some players may be disappointed,” the company spokesperson said. “This decision wasn’t taken lightly and was made at this time in the best interests of all our stakeholders.”

VGW joins other sweepstakes companies such as High 5 Casino and McLuck that recently backed out of New York, which is nearing the end of its highly-anticipated application process for three land-based casino operator’s licenses.

New York senate targets sweepstakes casinos

Sweepstakes casinos are not like traditional online casinos. They operate on a dual-currency system, in which customers earn or purchase Gold Coins and Sweeps Coins, to compete in different games. Customers win prizes on these games, typically in the form of coins or prizes, which can include cash, gift cards, or items.

The timing of VGW’s exit coincides with a push by a Senator to remove sweepstakes casinos from the state’s gambling market.

Joseph Addabbo Jr.’s (D-15th District) Senate Bill 5935, which has gained support in the Senate, would completely ban the operation and use of New York sweepstakes casinos.

“[S5935 would prohibit] operating, conducting, or promoting certain online sweepstakes games or supporting the operation, conduct, or promotion of such games,” reads the bill. It would also give “authority to the New York State Gaming Commission and the Attorney General to enforce penalties against violators.”

The bill would fine operators and affiliates $10,000-100,000 for offering sweepstakes casinos or accepting revenue generated on a sweepstakes platform.

Social and Promotional Gaming Association (SPGA), an organization representing sweepstakes operators, not including VGW, said that the bill and others around the country “doesn’t fix anything.”