New York: A bill that would ban sweepstakes gaming received a favorable vote

The New York Senate Racing, Gaming, and Wagering unanimously passed S5935, moving the legislation to the Senate floor, according to Howard Glaser, global head of government affairs at Light & Wonder. The bill hasn’t been scheduled to be heard yet, but it’s still a significant step in the battle to make the controversial online social casinos and sportsbooks illegal. 

Introduced by committee chairman and Sen. Joseph Addabbo, the New York bill “prohibits online sweepstakes games and revenue from illegal markets,” and provides penalties and enforcement provisions.        

Carrie Woerner, chair of the assembly’s racing, gaming, and wagering committee, has introduced a companion bill in the other chamber, but it has not moved out of that committee. 

On the attack

Addabbo’s bill is going after “dual-currency” payment systems that have come under attack by several states. Sweepstakes casinos offer similar games as regulated and offshore gaming operators but are funded with coins. 

While players can access some coins for free, they can also acquire more through cash payments. Winnings from online slots, table games, and even sports bets can be converted to cash and prizes.  

Addabbo’s legislation goes after financial institutions, payment processors, and providers of geolocation, gaming content, gaming platforms, and media affiliates, making it illegal for those sectors to support sweepstakes companies.  

S5935 calls for fines of $10,000 to $100,000 per violation as well as the loss of a gaming license. The state’s gaming commission, attorney general’s office, and police would have the authority to enforce the law if the bill passes.   

​“Online real money ‘sweepstakes casinos’ have recently become widely available in New York over the internet on mobile devices and personal computers, including to minors,” the bill states. “These products evade consumer protection, responsible gaming, and anti-money laundering requirements to which gambling in New York is otherwise subject. These products and operations are untaxed and unregulated. They present unfair competition to the state's legal, highly regulated and economically important casinos.”

Other states taking action

New York is one of several U.S. states to take legislative action against sweepstakes gaming. 

Maryland is even closer to banning this form of online casinos and sportsbooks, something no state lawmakers have done. The Old Line State’s Senate passed a bill last week that was sent back to the House of Representatives, where it will be heard on Thursday.   

In New Jersey, assemblyman Clinton Calabrese recently filed a bill calling for a ban on sweepstakes casinos less than two months after proposing legalization. 

Lawmakers in Connecticut and Mississippi have also filed bills to stop sweepstakes gaming.