After an investigation, the DGE concluded that VGW’s online gaming platforms misrepresented themselves as promotional sweepstakes while enabling users to engage in what it deemed real-money gambling without proper licensure.

According to the DGE’s findings, in conjunction with the Delaware State Lottery, VGW Luckyland allowed Delaware residents to purchase virtual coins and use them to participate in casino games, with the potential to win cash prizes.

While the company labeled its model as a sweepstakes system, the presence of financial transactions and the opportunity for monetary rewards brought its operations under scrutiny.

Under Delaware law, any real-money gaming must be conducted under strict regulatory frameworks, and unlicensed operators are in violation of multiple legal statutes.

The DGE determined that VGW’s operations violated not only the Delaware Constitution, but also the Delaware Gaming Competitiveness Act of 2012 and the Delaware Penal Code.

In response, the DGE issued a formal cease-and-desist order, and as of 2 April VGW Luckyland is no longer offering its services to Delaware residents.

The DGE reportedly first issued the cease-and-desist letter to the company in February 2023.

In its announcement of the company’s exit, the regulator pointed towards the risks that unregulated platforms may pose to consumers.

Unlike licensed gaming establishments in Delaware, which are subject to oversight and consumer protection protocols, platforms not licensed by the regulator often operate without transparency or accountability, it said.

It further suggested that players using such services may be at risk for identity theft, unauthorised financial transactions, or other forms of digital fraud.

Officials warned that the absence of regulatory supervision also allows these operators to engage in practices that would not be permitted in the state’s regulated gaming market.

Pressure on gaming platforms continues to build

One growing concern among regulators is the use of what are seen as deceptive tactics by some gaming platforms, as previously challenged in class action lawsuits.

According to the DGE, unlicensed platforms may copy branding elements from legitimate Delaware casinos, such as similar-sounding names, matching logos, and nearly identical URLs, in an effort to confuse consumers.

The regulator said this can make it difficult for users to distinguish between licensed and unlicensed services, increasing the risk of unknowingly participating in unregulated gaming activity.

Other states have also taken enforcement actions against the company. The Michigan Gaming Control Board issued a cease-and-desist letter to VGW and several other sweepstakes operators in a coordinated regulatory effort.

Similarly, in October 2024, Connecticut regulators took action against VGW, resulting in the company withdrawing from that state.

VGW is no longer offering its services in Connecticut, Michigan, Idaho, Montana, Nevada, or Washington, and is under pressure in several other states that may produce similar results.