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Read Full BioARB Interactive, the company behind sweepstakes casino Modo Casino, has won the bid to take over the bankrupt Publishers Clearing House (PCH).
PCH filed for bankruptcy in New York in April this year with debts of $40 million. Modo Casino will assume $378K in outstanding expenses and paid an additional $7.1 million to take control of the company.
Modo Casino To Expand Player Base Through PCH
PCH had already been moving away from its print marketing business towards a digital model. The integration with ARB and Modo Casino will further the move towards an online business.
Commenting on the acquisition, ARB CEO Patrick Fechtmeyer said, “Pending court approval, we’re excited to begin this next chapter and deliver an experience that honors the legacy of the brand while earning the trust of a new generation of players.”
Fechtmeyer added that the company is planning on, “digitally transforming the business through mobile‑first, interactive, and free‑to‑play games enhanced by the power of sweepstakes and prizes.”
Publishers Clearing House History In Sweepstakes
Founded in 1953, PCH has a long history of running sweepstakes by mail. PCH was made popular by its “Prize Patrol”, which delivered oversized checks to winners of competitions. At its peak, the company generated nearly $880 million in revenue from mail catalogs, magazine subscriptions, and sweepstakes in 2018.
The COVID-19 pandemic and consumer shift to online shopping led to struggles for the company. Those struggles were compounded by allegations of misleading customers by the U.S. Federal Trade Commission (FTC).
In 2023, PCH reached an $18.5 million settlement with the FTC over the accusations that the company manipulated consumers into believing that they had to make a purchase to win or to have a better chance of winning games that were advertised as “free to win.”
Commenting at the time of the bankruptcy filing CEO Andy Goldberg said, “our world-renowned sweepstakes will continue to be a cornerstone of our experiences, and we intend to continue offering free-to-play entertainment and awarding prizes in the ordinary course of business during and after this process to uphold the historic legacy of Publishers Clearing House.”
ARB Pushing Against States For Sweepstakes Legality
ARB Interactive is part of the Social Gaming Leadership Alliance (SGLA), set up by fellow sweepstakes casino operator VGW last month. The SGLA has been vocal against recent moves by states to shut down the platforms.
Montana and Connecticut have successfully passed legislation banning operators. Legislation in New York has forced most companies, including VGW out of the state. The New York Attorney General also issued 26 cease-and-desist letters to sweepstakes casinos. However, Modo Casino was not among the companies targeted.
The SGLA has argued that explicitly banning the dual-currency model used by operators such as Modo will hurt many businesses and state economies. Modo Casino allows players to purchase “Gold Coins” to play casino-style games on the platform. Users can also win “Sweepstakes Coins” via in-app rewards or sweepstakes mechanisms. Gold Coins have no monetary value, but Sweepstakes Coins can be redeemed for prizes. That can include cash.
SGLA Executive Director and former South Carolina Congressman Jeff Duncan urged Gov. Huchal not to sign the New York legislation, stating, “By advancing legislation that was drafted based on a fundamental misunderstanding of our industry and aggressively promoted by stakeholders with a competitive interest in shutting down these platforms, New York residents could lose access to popular, free-to-play online games enjoyed by millions.”
California Considering Ban On Sweepstakes
Last week, it was also announced that California lawmakers are considering legislation to explicitly ban sweepstakes casinos in the state.
Modo Casino is already facing legal scrutiny in California. A class-action lawsuit was filed in Napa County earlier this year against the company. Additional lawsuits have been filed against the platform in Illinois and Tennessee. The company also exited Arizona after being issued a cease-and-desist letter by the state’s regulator.
The acquisition of PCH, and its long history of running sweepstakes promotions will attempt to give the company more credibility and attract the customer-base of PCH to use online sweepstakes games.
