Social Gaming Leadership Alliance disputes NY illegal gambling claims

The Social Gaming Leadership Alliance (SGLA) has pushed back against a recent enforcement action by the New York Attorney General that it said mischaracterizes social online games with sweepstakes features as illegal gambling operations.

The industry group, which represents major providers of free-to-play online entertainment, said its members use widely accepted promotional models that offer genuine alternatives to paid entry and are distinct from gambling under U.S. law.

The alliance stated that these sweepstakes are intended to promote a legitimate service—play-for-fun social games—and always offer truly free ways to participate, such as daily reward systems and mail-in options known as Alternative Methods of Entry (AMOE).

The Attorney General’s action appears to challenge platforms where users can purchase in-game tokens. But SGLA pointed out that such tokens “cannot be redeemed, traded, or converted to anything of value” and are “solely used to enhance gameplay.” It added that prizes in sweepstakes promotions are awarded separately and are not bought with digital tokens. 

SGLA members operate under what the group described as “comprehensive consumer protection standards.” These include strict age verification, anti-money laundering procedures, Know Your Customer (KYC) protocols, and responsible gameplay tools like spending limits and self-exclusion features. The platforms also adhere to compliance obligations set by third-party financial and technology partners, the association said.

“While we disagree with the characterization of our members' lawful sweepstakes operations in today's enforcement action, we look forward to working with legislators and regulators to develop a comprehensive regulatory structure that protects consumers while preserving innovation,” said Jeff Duncan, SGLA Executive Director.

The group called for constructive engagement with New York officials and urged the development of a balanced regulatory framework that safeguards users while supporting the digital entertainment industry.

“We believe there is an opportunity to create a framework that provides appropriate oversight, mandates robust consumer safeguards, and recognizes the legitimate use of sweepstakes promotions,” Duncan said.

SGLA also focused on the economic and technological value of its industry, stating: “We believe productive dialogue can lead to solutions that enhance consumer protection while supporting innovation and economic growth.”