NCLGS Proposes iGaming Legislation and Ban on Sweepstakes

The National Council of Legislators from Gambling States (NCLGS) is shaping the future of U.S. iGaming.
A proposed Model Internet Gaming Act (MIGA) provides a unified framework for states to regulate online gambling responsibly and effectively.
With provisions for responsible gaming, competitive tax rates, and a sweepstakes ban, this draft could redefine the U.S. gambling landscape.
Explore how this legislation balances consumer protection, economic growth, and industry transparency.

NCLGS Unveils Bold iGaming Framework with a Push to Ban Sweepstakes Gambling

Key Points

1. NCLGS proposes a Model Internet Gaming Act to unify state iGaming regulations with a focus on responsibility and flexibility.
2. The draft recommends a ban on sweepstakes gambling, calling it a “gray sector” posing risks to consumers and markets.
3. Public feedback on the draft is invited until December 31, with discussions set for the NCLGS winter meeting in New Orleans.

The National Council of Legislators from Gambling States (NCLGS) has released its draft Model Internet Gaming Act (MIGA), marking a significant step toward unified online gambling regulations in the United States. Designed to harmonize state-level laws, the proposal emphasizes consumer protection, responsible gambling, and flexibility for diverse state gaming landscapes.

A Framework for the Future of iGaming

The MIGA draft provides a comprehensive regulatory framework covering licensing, taxation, and responsible gaming. The legislation seeks to complement existing land-based gambling operations while encouraging states to embrace the growing potential of online gambling.

Shawn Fluharty, NCLGS President and West Virginia Delegate, said:
“This framework is a catalyst for public policy that benefits states for generations.”

Key recommendations include:

• Licenses valid for five years, with separate categories for operators, platforms, and suppliers.
• Tax rates ranging from 15% to 25%, competitive enough to foster market growth without discouraging participation.
• Temporary licenses for qualified operators to ensure smooth market entry.

The draft also features strong anti-money laundering (AML) and Know Your Customer (KYC) protocols, restrictions on credit card use for gambling deposits, and a daily deposit limit of $20,000.

Emphasis on Responsible Gambling

Responsible gaming is at the heart of the MIGA proposal. It mandates the creation of a Player Health Program and requires operators to appoint a responsible gaming lead to collaborate with regulators. Advertising guidelines include:

• Prohibitions on the term “risk-free” in promotions.
• Bans on advertising on college campuses.

These measures aim to mitigate gambling-related harms while fostering public trust in the industry.

The Ban on Sweepstakes Gambling

One of the draft’s most notable provisions is the proposed ban on sweepstakes gambling, which has long operated in a legal gray area. NCLGS describes sweepstakes as resembling gambling while sidestepping traditional regulations.

The draft legislation proposes strict penalties for violations, including fines of $10,000 to $100,000 and imprisonment of up to two years for repeat offenders.

Tribal leaders and regulators have endorsed the ban, citing concerns over market cannibalization and illegal gambling activities. The proposal reflects growing momentum among lawmakers to close loopholes that allow sweepstakes operators to exploit regulatory gaps.

Public Feedback and Next Steps

The draft Model Internet Gaming Act is open for public comment until December 31, 2024, with a final version expected in early 2025. The NCLGS will discuss the draft at its winter meeting in New Orleans on December 14, 2024.

Fluharty expressed gratitude to contributors, emphasizing the importance of stakeholder feedback:

“We look forward to input from the public and stakeholders as we advance this important initiative.”

Balancing Regulation and Growth

The NCLGS framework aims to strike a balance between encouraging economic growth and ensuring robust regulatory oversight. By addressing key issues such as taxation, consumer protection, and industry transparency, the draft positions itself as a model for states navigating the complexities of iGaming legalization.

The NCLGS’s Model Internet Gaming Act has the potential to unify fragmented U.S. online gambling regulations while setting a high bar for responsible gaming and consumer protection. Its proposed ban on sweepstakes gambling reflects an effort to close regulatory loopholes and prevent exploitation.

As the public comment period unfolds, industry stakeholders and lawmakers have a unique opportunity to shape the future of U.S. iGaming. The NCLGS framework offers a pathway to modern, transparent, and fair gambling laws that prioritize safety without stifling innovation.

The draft may just be the catalyst needed to propel U.S. gambling into a more unified and responsible future.