Publishers Clearing House Acquired by Online Sweepstakes Casino Company
PHP Interactive, a Miami-based online sweepstakes gaming firm renowned for its Modo Casino, is the new owner of Publishers Clearing House (PCH).
Established in 1953 as a door-to-door magazine subscription service, PCH engaged subscribers in its famous sweepstakes, delivering surprise checks from the Prize Patrol worth between $1,000 and $10 million. The company collapsed in April, two years following its agreement to a Federal Trade Commission (FTC) order mandating a revamp of its sweepstakes entry and sales methods, cessation of surprise fees, and a payment of $18.5 million to impacted consumers.
ARB is providing $7.1 million in cash and will take care of around $378K in unpaid expenses. The Wall Street Journal was the first to report on the acquisition of PCH.
"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,” said Patrick Fechtmeyer, the co-founder and CEO of ARB Interactive.
ARB’s Modo Casino is a social casino that offers free play and features the likenesses of various celebrities, such as Snoop Dogg and John Daly, to promote its online platform. Alongside social gaming, Modo provides a secondary digital currency — Sweeps Coins — which can be utilized to win cash rewards.
Social Sweep Debate
Few subjects have stirred more debate lately in the United States gaming industry than social sweepstakes. Advocates of the applications and platforms assert they operate entertainment games, yet the aspect of secondary currency has led many critics to argue that these companies breach state and federal gaming regulations.
On the Modo site, the small print states, “Modo is a fun-centric website designed solely for entertainment.” Modo does not provide ‘actual-money betting.’
State gaming regulators, attorneys general, and lawmakers nationwide persist in clamping down on online sweepstakes casinos. Desist-and-cease letters have been dispatched, and fresh legislation specifically prohibiting online sweepstakes promotions has gained support in state legislatures.
Partnering with PCH, a brand recognized by many individuals over 30, may lend ARB Interactive and Modo Casino some legitimacy to their activities and assertions that it is not a real-money iGaming enterprise. Fechtmeyer states that ARB is dedicated to “digitally changing the business via mobile-first, interactive, and free-to-play games enriched by the influence of sweepstakes and rewards.”
PCH Dispute
The FTC's investigation into Publishers Clearing House found that numerous consumers incorrectly believed that increasing their purchases improved their chances of having the Prize Patrol show up at their door. The FTC’s accusation claimed that PCH employed “dark patterns” to deceive consumers into believing a purchase was essential to win or would enhance their winning probability.
The FTC further claimed that PCH included unexpected shipping and handling charges that significantly increased the subscription cost beyond what was advertised.
“Many consumers affected by these practices were older and lower-income,” the FTC said in June 2023.
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