New York Online Sweepstakes Casinos Face Uncertain Future as Ban Bill Awaits Governors Signature
New York Law Update: Online Sweepstakes Casinos Face Potential Ban as Bill Awaits Governor Hochul’s Signature
- New York lawmakers have passed legislation to ban sweepstakes sites
- Lawmakers say such online platforms violate the state’s gaming laws
- New York joins a slew of states cracking down on sweeps
New York lawmakers wasted no time in following State Attorney General Letitia James’ lead in deciding that online sweepstakes games have no place in the Empire State.
On Tuesday, just four session days after the New York Senate approved Senate Bill 5935 with a 57-2 vote, the State Assembly passed the bill unanimously 141-0. The statute seeks to amend the state’s racing, parimutuel wagering, and breeding law to “prohibit online sweepstakes games and revenue from illegal markets.”
The legislation would empower the New York State Gaming Commission (NYSGC) and the Attorney General to impose penalties against violators. Those fines would range from $10,000 to $100,000 depending on the severity of the infraction. A licence for the violating entity could also be at stake.
This bill follows shortly after James sent cease and desist letters to 26 companies alleged to have violated New York’s gaming laws, stating that these illegal sweepstakes platforms allowed New Yorkers to play traditional casino games for money.
Sweeps Controversy
Sweepstakes operators claim they operate social casino games where purchases are not required to win. The industry likens these platforms to major retailers like Walmart and CVS, which offer chances to win coupons through promotional games.
Critics contest these claims, alleging that many sweepstakes employ “dual-currency” systems where secondary virtual coins can be redeemable for cash.
Online real money ‘sweepstakes casinos’ have recently become widely available in New York. These products evade consumer protection, responsible gaming, and anti-money laundering requirements.
— New York State Sen. Joseph Addabbo
“These products and operations are untaxed and unregulated. They present unfair competition to the state’s legal, highly regulated, and economically important casinos,” Addabbo added.
New York is among many states that have taken similar measures, with recent actions seen in Mississippi, Louisiana, Connecticut, Maine, Wyoming, Maryland, Arkansas, New Jersey, and Pennsylvania.
Sweeps Advocacy Group Asks for Veto
SB5935 currently awaits Governor Kathy Hochul’s signature. The sweeps industry, led by the Social Gaming Leadership Alliance (SGLA), argues that state lawmakers rushed through “flawed legislation” and is urging the governor to veto the bill.
By advancing legislation based on a fundamental misunderstanding of our industry and aggressively promoted by stakeholders with competing interests, residents might lose access to popular, free-to-play online games enjoyed by millions.
— Jeff Duncan, Executive Director of SGLA
Members of the SGLA include major players in the sweeps market such as VGW, Chumba Casino, Global Poker, Luckyland Slots, McLuck, and Hello Millions.
Summary
The recent legislation blocking online sweepstakes games in New York marks a significant step in reinforcing the regulations around gaming in the state. As this law develops, it will be crucial to observe both the implications for consumers and the future of the online gaming market.
