The Online Casinos That Can Operate as Long as They Say They Arent Actually Casinos

In most states, playing slot machines online for real money is illegal.But a group of companies known as sweepstakes casinos has found a way around the law to let users play classic casino games online.Their revenues have grown 10-fold in the last five years, and they’re now large enough to feature ads with Ryan Seacrest, Drake and Michael Phelps.

Only recently have states like New York and Maryland contemplated restricting them, with billions of tax dollars at stake.But the loophole used by sweepstakes casinos complicates the states’ ability — and desire — to take action.That loophole? The “no purchase necessary” rule that differentiates a legal sweepstakes from an illegal lottery.It’s a rule you might be familiar with if you ever played McDonald’s Monopoly promotion.

In case you missed it, here’s how it worked: During the promotion, certain menu items came with special “game piece labels” from the Monopoly game board.These could be traded in for prizes, like a free hamburger or a cash sum.

The key is you weren’t buying the tokens directly; they came with your purchase of fries.And in order to fully qualify as a sweepstakes, McDonald’s also had to let you receive tokens by mail — where the “no purchase necessary” comes in.Instead of selling fries, the sweepstakes casinos sell a valueless online currency often called Gold Coins.

(You can use the coins as play money for gaming, but they cannot be redeemed for prizes.)And instead of a Monopoly token, your purchase earns you another currency, often known as Sweepstakes Cash.This “cash” is usually equivalent to dollars.

So if you spend $100 on Gold Coins, you receive $100 worth of Sweepstakes Cash.This is what you can then use to gamble on games like blackjack or roulette, cashing out any winnings back into dollars....