ClubWPT Gold Exits Arizona Market After Cease-and-Desist Order

_{Arizona residents can no longer play online poker after ClubWPT Gold announced it would be winding down services as of Saturday, Aug. 8. (Photo: Nathaniel Noir / Alamy)}

Online poker site ClubWPT Gold withdrew from the Arizona gambling world on Saturday, Aug. 8, a decision that game about a month after the site had been targeted by a cease-and-desist order from state regulators.

ClubWPT Gold announced the decision on Aug. 9, just one day before all gameplay ended on the site for Arizona customers.

Sweepstakes Model Under Fire Again

ClubWPT Gold operates under a sweepstakes model, though it had moved on from using a dual currency setup similar to those common at sweepstakes casinos. Instead, users can buy Hand Analysis Credits, which can then be used to unlock training tools, feedback, and analysis of their poker play.

However, all purchases also earn a bonus in chips, with one chip awarded for every dollar spent. Players may also receive free chips by mailing a request to the company, or via various rewards and giveaways. Users can redeem chips for cash prizes, again at the rate of one dollar per chip.

Since the easiest way to obtain chips is via purchase, and the value of chips is directly tied to purchases, this model resembles the one that has created controversy at sweepstakes casinos across the country. Some critics have said that it is clear that users know they are really purchasing the chips – not receiving them as a “bonus” – and surveys have suggested that most users consider sweepstakes sites to be gambling operations.

That has led to pushback in many states. Even before the recent decision, ClubWPT Gold wasn’t available in states including New Jersey, Connecticut, Washington, or Montana.

In early July, Arizona moved to join that list. ClubWPT was among five operators – a list that also included Bookmaker and Raffle Creator – who were sent cease-and-desist orders by the Arizona Department of Gaming (ADG). The ADG accused the operators of illicit promotion of gambling and money laundering, among other charges.

“Through these cease-and-desist orders we are putting operators on notice: their conduct runs contrary to Arizona law and they must stop promoting illegal gambling,” ADG Director Jackie Johnson said in a statement announcing the orders.

ClubWPT Folds to Arizona Pressure

When it came to ClubWPT specifically, ADG argued that the site was violating the state’s prohibition of online poker, and that it allowed users under the age of 21 to participate. While ClubWPT argued that it operated under “applicable sweepstakes laws,” the ADG told the site that the argument was problematic.

“ 'Sweepstakes’ is not a defined term under Arizona law, there are no ‘sweepstakes’ laws or rules, and there is no exception from the illegal gambling statutes for conduct labeled ‘sweepstakes,’” the order stated.

In Friday’s announcement, ClubWPT Gold signaled it wasn’t planning to fight the state on these issues.

“We are incredibly grateful for our Arizona community, which makes this announcement especially difficult to share,” the announcement said. “As part of changes to our operations in response to state regulatory action, ClubWPT Gold will be winding down services in Arizona.”

According to ClubWPT Gold, purchases and postal requests for free chips were terminated immediately as of that announcement. Gameplay on the site was unavailable to Arizona users as of Saturday, Aug. 8, and players must request redemptions for their coin balances by Aug. 13 at 11 p.m. MST.