The Maryland Lottery and Gaming Control Agency (MLGCA) has issued a cease-and-desist letter to Virtual Gaming Worlds (VGW), demanding that the operator of popular sweepstakes casinos Chumba Casino and LuckyLand Slots exit the state or face potential consequences.
In the letter dated March 12, 2025, the MLGCA informed VGW that it is "offering and conducting online gaming activities in Maryland without legal authority to do so." The agency, through Managing Director Michael Eaton, emphasized that "the only online gaming permitted in Maryland is mobile/online sports wagering and online fantasy competitions," while stressing that "online casino gaming (also known as iGaming) is not permitted in Maryland."
The regulator noted that VGW has not been issued any of the required licenses or registrations to operate legally in the state:
No sports wagering license
No casino gaming license
No fantasy competition operator registration
VGW has been given until 5:00 PM ET on March 27, 2025, to respond to the regulator's letter. If the company acknowledges it is offering gaming activities in Maryland, it must provide:
Detailed descriptions of all casino game offerings
Information about any sports wagering products
Details of fantasy competition offerings
Legal analysis or opinions that support VGW's position that its operations are permitted without state licensure
Most significantly, the MLGCA is demanding that VGW acknowledge it will "cease offering any sports wagering, casino game, or fantasy competition in Maryland" within 10 days of the letter's date.
The regulator's letter includes a stark warning about the consequences of failing to comply, stating that non-cooperation "may jeopardize the ability of VGW to ever be issued a license for sports wagering or gaming, registration as a fantasy competition operator, or any other license, registration, or certification from the Commission in the future."
This ultimatum puts VGW in a difficult position as it considers its response and next steps in Maryland.
The timing of the MLGCA's letter has raised eyebrows in the gaming industry. It was sent just one day after a VGW representative, Josh White, testified at a House Ways and Means Committee hearing on March 11 in opposition to House Bill 1140, which seeks to ban sweepstakes casinos in Maryland.
During his testimony, White argued that sweepstakes and social gaming should not be classified as illegal casino gambling, stating that "VGW uses sweepstakes promotions the same way that McDonald's and Microsoft do: as a marketing tool where players never pay for a chance to win." He urged legislators to consider regulation rather than prohibition.
The letter also arrived on the same day that the Maryland Senate unanimously approved Senate Bill 860, a companion bill to HB 1140, by a vote of 47-0. The Senate bill is scheduled for a House committee hearing on March 20.
The cease-and-desist letter to VGW is not an isolated action. The MLGCA has reportedly sent similar letters to at least 11 other sweepstakes casino operators as part of a broader effort to crack down on what it considers unauthorized gaming activities in the state.
VGW has faced similar regulatory challenges in other states, with Connecticut, Delaware, and Michigan previously issuing cease-and-desist letters to the company and several of its competitors.
What sets the Maryland letter apart from previous regulatory actions is the request for VGW to provide a legal opinion explaining why its sweepstakes model is permissible under state law. This unusual demand could potentially force VGW to publicly reveal legal arguments it has thus far kept private despite facing approximately 20 lawsuits challenging its business model.
Industry observers note that VGW faces a difficult choice: either comply with the regulator's demands and potentially undermine its legal position in other states, or resist and likely strengthen the case for the pending legislation to ban sweepstakes casinos outright in Maryland.
The sweepstakes casino business model, which offers "free" gameplay alongside a secondary virtual currency that can be used to win real money, has come under increasing scrutiny nationwide. Recent developments include:
Google updating its Ads policy to classify sweepstakes casinos as online gambling
Multiple state cease-and-desist orders
Numerous private civil lawsuits
Growing legislative efforts to ban or regulate these platforms
News that Connecticut may criminally charge a prominent sweepstakes operator with over 1,000 counts of illegal gambling
When contacted by media outlets regarding the Maryland letter, VGW declined to comment on the situation. The company has until March 27 to decide its course of action and respond to the regulator's demands.
As the deadline approaches, the sweepstakes casino industry will be watching closely to see how this high-stakes confrontation between one of the sector's largest operators and a state regulator unfolds, potentially setting precedents for similar actions in other states.