New York Senate Advances Bill to Ban Online Sweepstakes Casinos
The New York Senate Racing, Gaming, and Wagering Committee approved Senate Bill 5935, which seeks to ban online sweepstakes gaming operators in the state. The bill, sponsored by Senator Joseph Addabbo, now advances to the full Senate for further consideration.
Addabbo, a strong advocate for regulated online gambling, raised concerns about the unregulated growth of online sweepstakes casinos that mimic traditional casino games but operate without the necessary regulation.
Steps Taken to Outlaw Sweepstakes
“These online sweepstakes casinos essentially mimic casino games but operate without regulation,” said Addabbo. “Several states, including Connecticut, have already taken steps to outlaw them. We are looking to ensure similar protections in New York.”
The committee voted in favor of the bill, with two members supporting it and one member voting “aye without recommendation.”
While Senator James Tedisco expressed concerns about the potential impact on younger individuals, Senator Pamela Helming acknowledged the bill’s intent but withheld full endorsement, citing unresolved concerns from her constituents.
Regulatory Actions and Legal Precedents Supporting the Ban
Addabbo’s push for the bill is supported by recent enforcement actions in Connecticut, where the Department of Consumer Protection revoked the license of High 5 Games and issued over 1,000 criminal charges against its platform, High 5 Casino.
Connecticut law only permits online casino operations via DraftKings and FanDuel under agreements with tribal partners. The bill aims to prohibit sweepstakes games, which are defined as online or mobile contests that simulate casino, lottery, or sports betting games, and use a dual-currency system to allow players to redeem winnings for cash or prizes.
The proposed legislation also targets companies that support sweepstakes gaming, including financial institutions, payment processors, geolocation providers, and affiliates. These entities could face fines up to $100,000 per violation, as well as the potential loss of licensure.
A similar bill has already passed the Senate in Maryland and is currently under consideration in the House.
Concerns Over Consumer Protection and Industry Response
Senator Addabbo emphasized the need for consumer protection from these unregulated gambling sites, which are often based offshore, making enforcement challenging.
“Many of these operators are based offshore, making enforcement difficult, and they frequently target vulnerable populations such as youth and seniors,” he said.
He argued that the use of virtual currency to play games and win money equates to gambling and should be subject to regulation.
If enacted, the bill would grant enforcement powers to the New York State Gaming Commission, state police, and the Attorney General’s Office. The law would classify online sweepstakes casinos as illegal gambling operations and impose penalties for noncompliance.
The bill also aims to establish clearer regulations for sweepstakes operators and to prevent illegal gambling activities from proliferating in New York.
The Social and Promotional Games Association (SPGA), however, opposes the bill, arguing that it misrepresents sweepstakes gaming and bypasses industry expertise. In a statement to SBC Americas, the SPGA criticized the committee’s expedited approval process, claiming that the legislation risks causing economic harm.
Similar Legislative Efforts Across the U.S.
The bill’s progression reflects a growing trend in the U.S., with similar legislative efforts underway in states like Mississippi, Florida, Nevada, and New Jersey. A bill in Mississippi banning sweepstakes operators has cleared both legislative chambers, with an amendment to include sports betting provisions.
In addition to targeting unregulated sweepstakes operators, Addabbo’s bill emphasizes the importance of transitioning online gambling to a regulated environment. He argued that online casinos should be offered as a safe and legal alternative for players.
The senator also referenced Michigan, Idaho, and Washington, where similar bans have been implemented, as examples of how states can protect their citizens from unregulated gambling activities.
The legislation will now undergo further review by the full New York Senate as lawmakers continue to evaluate its potential impact on the gaming industry.
Source: “New York Senate Advances Bill to Prohibit Online Sweepstakes Gaming”, realmoneyaction.com, March 20, 2025