Legal Change Unwittingly Opens Doors for Illinois Sweepstakes Games

Posted on: January 5, 2014, 05:30h. 

Last updated on: January 3, 2014, 12:33h.

When is a coupon not really a coupon? Illinois legislators say when it’s fronting for illegal gambling.

It looks like history is repeating itself for the Illinois gambling industry. For years, Illinois had a problem with the unregulated video poker machines that could be found in countless bars around the state. That’s why lawmakers eventually agreed to legalize gambling machines, regulating and taxing them to bring the industry out of the shadows. Now, a new change to gambling laws has opened the door to yet more unregulated gambling devices – this time in the familiar guise of sweepstakes games.

Barely Legal

That’s right: Illinois is just the latest state that is seeing a rise in these quasi-legal gambling machines. In this case, they’ve become known as “coupon kiosks,” and they’re popping up across the state – even in Chicago and many suburbs that have voted against legalized video gambling machines in the past.

In this particular incarnation of the sweepstakes game, players receive a coupon for online merchandise as a result of playing. They also have the option of playing for free. These rules mean that the machines are technically following the laws that govern sweepstakes promotions used by major companies.

“The primary focus is to promote those products, and the opportunity to play a game is secondary,” says Jeffrey Steinback, a representative of Windy City Promotions, a company that is one of the firms supplying the new machines to venues across the state.

Regulators Want Them Gone

But the Illinois Gaming Board disagrees. They issued an opinion in December calling such machines illegal, while police are still looking into the issue before making any arrests in the matter. Meanwhile, others in the state are concerned that the machines could lead to exactly the situation the new gaming laws were meant to eliminate: a large, uncontrolled gambling industry that could be bringing in millions in revenue without any oversight or regulation.

The nature of these games is slightly more creative than similar “sweepstakes” games in other states, as it’s at least conceivable that someone might use these machines for their stated purchase. For instance, one machine allows users to insert cash in order to receive a coupon worth twice as much, and that could be redeemed at a website. That site offers more than 60 products, ranging from coffee and tea to electric guitars. The coupons had a maximum value of 30 percent of a product’s price.

Of course, that’s not all the machine does. After the coupon is received, the customer has the chance to win a cash prize: one that can be revealed automatically or through a simulated slot machine game. Those winnings are paid out by the bar.

In order to get around gambling laws, the machines can be played for free – but only through a complex process in which a customer must get a code from a machine, send in an index card with that and other information, and wait to receive a $1 credit up to a month later.

The machines have taken hold because of a minor change to state law pushed by State Representative Lou Lang – someone who didn’t even realize sweepstakes games had become such a controversial issue in other states.

“I was just convinced at the time that this was something that looked like a gaming device but wasn’t gaming,” Lang said. “It was a sweepstakes.”