Arizona Regulator Sends Two C&D Letters to Social Sportsbook

Social sportsbooks may be running out of time in the Copper State.

Arizona’s Department of Gaming (DOG) has sent out cease & desist letters to Fliff and Thrillzz social sportsbooks. These platforms are being accused of offering an illegal form of event wagering, even though they do not accept real-money wagers. The two industry-leading platforms will now face a decision to exit the market or gear up for a legal battle.

The DOG also sent letters to BettySweeps and Pulsz sweepstakes casinos. 

Arizona Rejecting Social Gambling

With the sports betting regulator targeting Fliff and Thrillz, it shows that the state is no longer willing to tolerate social gambling.

Social sportsbooks came to prominence over the last few years. The lack of real-money wagers allowed them to operate outside of state gambling regulations, leading operators to launch in states where sports betting remains illegal. A few of those states pushed back early on to keep the industry outside their borders, but many allowed it to operate in a gray legal area.

With Arizona’s sports betting market thriving, it appears the state is looking to crack down on any potential threats to it. 

There has also been a growing concern over the industry’s link to problem gambling. The worry is that these operators use the temptation of big prizes to encourage customers to purchase more coin packs. That makes them a hidden threat to vulnerable gamblers, leading states like Arizona to push social sportsbooks out.

Operators Face Serious Penalties

Arizona isn’t taking its effort to push out social sportsbooks lightly. The letters sent to Fliff and Thrillz alleged that the platforms qualify as a criminal enterprise, which means felony charges will follow if they don’t exit the Arizona market. Those charges would include the promotion of gambling, illegal control of an enterprise, and money laundering.

While both operators have the right to fight the DOG order in court, the threat of being charged with three felonies makes that a tall order. While they could attempt to call the regulators' bluff, it seems likely the DOG is looking to deliver a message to the social gambling industry.

Is the Sweepstakes Industry Already Finished?

The sweepstakes industry has been under fire over the last year. After finding success as an alternative to real-money betting, state regulators are changing their tune on the industry. That has led to bans in the industry being proposed, with some states already enacting them.

Neighboring California is one of the states looking to ban social gambling. They have sent out a flurry of cease-and-desist letters to sweeps and daily fantasy sports operators, though legal challenges to stop the effort have begun. 

Social sportsbooks have some support, but not compared to the country’s regulated sports betting industry. That pressure is crushing the sweeps platforms, and could lead them to disappear from the US soon.