New York Introduces Bill to Ban Sweepstakes Games

New York is home to many of our best sports betting sites, hosting the nation's biggest legal sports betting market. Its casino industry is growing and evolving. However, sweepstakes casinos are encountering a speed bump.

State Senator Joseph P. Addabbo, Jr., is introducing a gambling reform bill, S5935, that could prohibit online sweepstakes games from operating in New York.

In some respects, sweepstakes games are similar to online casinos: both offer games, and players can place bets in these games. Where one would use actual currency at real money online casinos, sweepstakes games only permit the use of gold coins or sweeps coins. These currencies are internal to the games and can be refilled or won regularly. Any winnings can then be redeemed as a cash prize or gift card.

The best sweepstakes casinos don’t permit real-money bets, they often pass under the legal radar of legislation regulating online casinos. Several bills across the U.S. have endeavored to define and regulate sweepstakes games, with some—such as Washington, Idaho, Nevada, and Michigan—banning them entirely. 

Bill S5935 defines online sweepstakes games as such:

“Any game, contest or promotion that is available on the internet and/or accessible on a mobile phone, computer terminal or similar access device, that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize, award, cash or cash equivalents, or any chance to win any price, award, cash or cash equivalents and simulates casino-style games including but not limited to draw games, instant win games, keno, and bingo, and sports wagering. A sweepstake shall not include a game which does not award cash prizes or cash equivalents.”

The bill states that its purpose is to make it “unlawful for any applicant, licensed entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider or media affiliate to support the operation, conduct or promotion of sweepstakes games within the state of New York.”

This could make it challenging for gaming affiliates and suppliers to operate in New York, as it would make it illegal for entities to, directly or indirectly, accept revenue derived from online sweepstakes games. 

The bill was introduced on March 4 and currently sits with the Senate Racing, Gaming, and Wagering Committee, which Addabbo chairs.

Addabbo has wanted to regulate sweepstakes since January

Addabbo has been keen to regulate online casinos and lottery spaces. Already in January, he made it clear that a ban on sweepstake games was on the table due to his need to protect New Yorkers from potential harm that unregulated gambling could cause. 

“Without an option for safe, regulated online gaming, many individuals will fall victim to sweepstakes casinos that entice customers through free play advertising with the potential for prizes through the purchase of gold coins.”

He encouraged his colleagues and the Governor to take action against unregulated sweepstakes casinos, adding, “I will work to ban or incorporate sweepstakes casinos in the state, akin to current laws in Michigan, Idaho, and Washington, and I will push for iGaming as a safe, effective alternative for online casino enthusiasts.”

New York will award new casino licenses in 2025

Although the future of sweepstakes games in New York is yet to be decided, the casino landscape may expand.

The New York State Commission intends to award up to three casino licenses for projects in downtown New York in 2025. Multiple proposals have already been submitted; the final deadline is June 27. All successful proposals will be put forward by Dec. 1.