A ban on an industry also means a ban on jobs, a ban on economic activity, a ban on any consumer benefit. It is an extreme measure, a serious move that at the very least should not be rushed.
Yet, in Indiana, a bill to ban an industry is rapidly advancing in this year’s short session.
House Bill 1052 would not allow any sweepstakes games, or social plus games to be offered in Indiana. These games are primarily played on one’s phone. This is the digital evolution of classic sweepstakes contests from the past, like Publishers’ Clearing House, which as developed as smartphones have grown.
With 10 million players across the country, 220,000 in Indiana, sweepstakes games specifically generate $12 billion in annual sales. Their trade association estimates that under a sensible tax rate, they would generate around $20 million in revenue for the state.
This is already a federally regulated industry that is asking to submit to a legal state regulatory regime and sensible taxation. These companies fall under oversight from the Federal Trade Commission, Federal Communications Commission, USPS and Department of Justice.
Where there are state sweepstakes laws, companies must follow them, along with consumer protection laws.
They use age verification, geolocation, and other measures to monitor and manage users. Such rules could be codified to ensure examples when companies do not live up to these standards they are not granted a license, or face some penalty.
This is not a clear-cut case of where all such apps are skirting the rules, nor do they qualify as illegal gambling. These games have evolved from sweepstakes contests of the past which have long had a legal status separate from the gaming that takes place in a casino.
There is a push, backed by Indiana’s own Attorney General, to have the federal government investigate and take action against illegal operators. This is sensible and appropriate as the U.S. Department of Justice has jurisdiction. However, banning all companies, even those that comply with federal law and are working on legislative solutions to be regulated in Indiana, is a step way too far.
Of course, far-left, Democrat-dominated California has chosen to ban these platforms. That heavy-handed, thinly considered, move is not the example any red state should follow. A short session is also not the time to rush into a ban of an entire industry.
Companies that have operated in Indiana for years without incident should not be indiscriminately crushed along with illegal outfits, they should be regulated and licensed. As with any industry or market, if there is demand, onerous bans only drive activity toward a black market and benefit the worst actors who do not care about following the law.
Opportunities have been missed to amend House Bill 1052 to take a more measured approach and drop the ban on good-faith operators. There is still time, however, for legislators to change course, the Senate can stop this California-style ban.
After tax hikes last session, Indiana lawmakers do not need to add heavy-handed regulation this session.
