Are online "sweepstakes" legal?

The debate around the U.S. legality of online “sweepstakes” continues to swirl around the gaming genre, with the New York Times publishing a useful examination of the phenomenon this week.
The article details the process whereby internet café owners sell phone cards encrypted with sweepstakes entries for Internet playtime, allowing customers to play graphic representations of slots for prizes.
But is it gambling, the newspaper asks? Opinions clearly differ, as various interested parties’ reaction to the question shows.
“The disagreement is playing out throughout the country as this often unregulated business model known as fringe gambling proliferates, vexing law enforcement agencies and consumer advocates concerned about fraud,” the NY Times observes.
“These computer games are designed to look and feel like casino gambling while technically being only “sweepstakes.” Because a sweepstakes is said to be predetermined, not a game of chance, it is not gambling and falls outside of state gambling laws — or so the operators say.”
In Casselberry, FL., police chief James Ruf expressed enforcement’s frustration with the question, saying: “We’re not getting any clear direction from anyone.”
The Times reports that officials in California, North Carolina, Utah and other states are, like Florida, grappling with the legality of gaming cafes, in some cases regulating and tolerating them, and, in others, prosecuting them and winning.
The article is an absorbing read on a subject of topical online gambling interest, and is recommended.
For more please visit: http://www.nytimes.com/2010/05/07/us/07gambling.html

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