The Securities and Exchange Commission said Wednesday it is launching an online gambling incentive program, but the move comes as online gambling companies continue to face legal challenges and investors worry about how the rules will be enforced.
The Securities and Exchanges Commission is launching a new online gambling initiative, but regulators have said they will focus on gaming sites like gaming portals and virtual casinos.
The commission has approved a program that would reward sites that offer free, ad-free, and instant gaming to help them grow and diversify.
The move comes amid a crackdown on online gambling.
In December, New York Attorney General Eric Schneiderman ordered gaming sites to stop accepting new accounts, saying they were using their existing customers as a front for illegal activities.
The New York State Department of Financial Services, which oversees gaming in the state, also has begun cracking down on the sites.
The SEC has proposed a $5 billion incentive program that could be rolled out in phases over the next year.
The agency plans to offer a 30% incentive to online gaming companies, which could amount to $1 billion per year.
The money would be split among companies that offer the most gambling options, including free and ad-supported games, betting sites that can accept bitcoins, and gamblers who are willing to spend a certain amount of money on virtual gaming.
The incentive program could also be expanded to allow companies to offer cash back, with a limit of $100.
Other online gambling opportunities, such as a program for betting on the Super Bowl, have been proposed.
The S&P 500 futures are down 3.6% in premarket trading after falling to a session low.