The iGaming supplier has become the first major provider to exit the controversial sweepstakes casino vertical amid regulatory pushback and lobbying from traditional gaming interests.

A spokesperson told NEXT.io: “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.”

The news follows a civil enforcement action filed by the City of Los Angeles against sweepstakes operator Stake.us, which named several large online casino suppliers including Pragmatic.  

Despite the exit likely being viewed positively by state gaming regulators, Pragmatic, unlike the other businesses named in the suit, is not currently active in the licensed US iGaming market.

As such, Pragmatic’s decision can be interpreted as a signal the provider may be considering expanding its traditional online casino business into the US.

Is Pragmatic Play considering a push in US iGaming?

While the company is among the first to take the decision to suspend its operations in the space, it makes it more likely others will follow in its footsteps.

NEXT.io understands Evolution has also pulled its games from Stake.us in California.

Further, NEXT.io understands Pragmatic had previously limited its offering in several states, depending on the nature of each state’s existing restrictions.

Some providers have always stayed away from the sweeps market, including Light & Wonder, which has lobbied aggressively against the vertical, and Play’n GO.

The latter issued a press release in May outlining its opposition to ever supplying games to any sweepstakes casino.

Johan Törnqvist, Play’n GO CEO, said at the time: “Sweepstakes casinos do not operate inside a regulated framework and that’s not something we support. Our commitment to regulated markets is absolute. We will never supply our games to sweepstakes casinos.”

It also comes as the Golden State’s sweepstakes casino ban Assembly Bill 831 continues its way through the legislature, now headed for a full Senate floor vote.

If passed, the bill would possibly criminalise suppliers, stating in the text it is 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.”

The bill was recently softened in the amendment process, with the word “knowingly” now included.

This word will aid some content suppliers which argue their control over the final destination of their games is limited through the use of aggregators, reducing their potential legal liability.

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