Pragmatic Play has confirmed that it will stop all licensing of its games for the US sweepstakes operator.
This follows the supplier being dragged into a California legal battle as Stake.us was sued by the Los Angeles City Attorney for operating what it describes as “one of the largest and most profitable illegal gambling enterprises in California’s history”.
At the same time, Pragmatic Play, alongside other suppliers such as Evolution AB and Hacksaw Gaming, were also included in the action, which accused the suppliers of aiding and abetting the running of Stake.us’ enterprise.
A Pragmatic Play spokesperson told iGaming Expert: “Pragmatic Play has chosen to discontinue licensing its games to sweepstake operators in US States where restrictions were not already in place, in light of regulatory developments and evolving legislation.
“We remain committed to the highest standards of compliance and will continue to engage transparently with regulators.”
Growing tensions
The regulatory developments cited by Pragmatic Play stem from legislators in many US states asserting that sweepstakes casinos directly violate state gambling laws.
As a result, New Jersey, Montana and Connecticut have already explicitly banned online sweepstakes gaming, while numerous other states are considering similar legislation.
Meanwhile, state regulators have also acted against the sector by sending operators cease and desist letters. VGW, the largest sweeps operator in the US, has been forced to exit around a dozen states in the last year.
In California, the site of the legal battle, efforts to ban sweepstakes have moved a step closer after Bill AB 831 advanced out of the Senate Appropriations Committee and is now heading to the full Senate floor for a vote.
Most importantly for Pragmatic Play, proposed legislation seeking to criminalise sweepstakes are now beginning to include suppliers and affiliates related to sweepstakes operations.
AB 831 states that, if passed, it will be unlawful for any “entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to knowingly support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.”
According to the court documents in the civil enforcement, Stake.us carried 594 casino games from Pragmatic Play, representing 30% of its content library.