New York Goes All-In on Sweepstakes Casino Ban as More States Up the Ante

However, then is then, and now New York becomes the 5th state in the US to introduce an online gambling regulation proposal to prohibit sweepstakes casinos.

Meanwhile, the Social and Promotional Games Association (SPGA) manifested its opposition to the bill and reminded lawmakers of the positive economic impact the industry brings to the table, especially in job creation. Instead, the organization calls for gambling regulations that are more economically beneficial for the city.

Breaking Down S5935

Under Addabbo’s legislation, any entity that knowingly accepts revenue from online sweepstakes operators could face hefty fines ranging from $10,000 to $100,000 per violation.

That threat extends to a wide network of vendors and partners, including:

• Financial institutions
• Gaming content suppliers
• Payment processors
• Platform providers
• Geolocation services
• Media affiliates

The proposed law defines sweepstakes gaming as any online game or promotion utilizing a dual-currency system that allows players to exchange virtual currency for real-world cash prizes or equivalents. It basically covers all five verticals from the gambling industry, from slots and blackjack to sports betting.

However, the broad scope has industry stakeholders worried about unintended consequences for legitimate businesses.

Already Legal

In a strongly-worded statement, the SPGA called the bill “deeply flawed,” labeling it a “colossal waste of government resources” and an “affront to personal freedoms”. The association argues that S5935 risks criminalizing legitimate promotional sweepstakes run by small businesses and major corporations alike.

“We appreciate New York lawmakers’ formal recognition that social sweepstakes are a legal form of entertainment – you don’t need to outlaw something if it is already illegal,” added the organization.

This is something that Addabbo seems to acknowledge. In an LSR article, back on February 28th, Addabbo mentioned that sweepstakes are legal in New York, and that would remain true unless the state administratively bans them.

Party of Five?

However, lawmakers in Connecticut, Florida, Mississippi and Maryland are also placing heavy bets against sweepstakes casinos, and New York is following suit.

For example, in the Sunshine State, Representative Walter Barnaby filed House Bill 953 on February 24, 2023. Two days later, on February 26, Senator Corey Simon filed Senate Bill 1404. Meanwhile, last week in Maryland, Senate Bill 860 was presented during a hearing of the Budget and Taxation Committee.

Hawaii, on the other hand, historically one of the strictest states against gambling, is considering sweepstakes and free-play games as potential offerings to attract tourists. Back on January 23, State Senate President Ron Kouchi introduced SB 2510.

What About iGaming?

While Addabbo is pushing hard against sweepstakes casinos with one hand, he’s already placed bets on the expansion of online casinos with the other. Back on January 21, Addabbo filed Senate Bill 2614.

The bill that would finally allow New Yorkers to play blackjack for money at home is currently with the Senate Racing, Gaming, and Wagering Committee. The proposal includes online poker and digital lottery sales in the Empire State’s gaming regulations. However, the committee has only met once this year and hasn’t discussed iGaming proposals at all, as reported by this casino news portal last week.

This is the third time Addabbo has filed a similar proposal, which includes a 30.5% tax. Lawmakers in the Big Apple would be wise to approve online gambling regulations soon. The revenue from mobile gambling apps soared to $8.41 billion in 2024 in the US, according to the latest report from the American Gaming Association (AGA).