New York Senate Approves Bill to Ban Sweepstakes Casinos
The New York Senate has moved forward with a legislative effort to outlaw sweepstakes gaming by approving a bill aimed at shutting down online social casinos and sportsbooks. On Tuesday, the Senate Racing, Gaming, and Wagering Committee voted unanimously in favor of bill S5935, pushing it to the Senate floor for further consideration. While a hearing has yet to be scheduled, this approval represents a crucial step in addressing concerns surrounding unregulated gaming operations in the state.
LISTEN TO THIS ARTICLE:Sen. Joseph Addabbo, the committee's chairman, sponsored the legislation to curb the growth of online sweepstakes gaming. The bill focuses on restricting digital sweepstakes platforms and revenue streams tied to unauthorized gambling activities. It also lays out specific penalties and enforcement measures for those found in violation of the law.
Related: Assemblyman Proposes Sweepstakes Ban in New JerseyThe proposed legislation aims to eliminate regulatory loopholes that have allowed these gaming sites to function without direct oversight from the state. In parallel, Assemblymember Carrie Woerner introduced a similar bill in the New York State Assembly. However, that version of the legislation has not yet moved past the committee stage.
The bill is particularly focused on sweepstakes casinos that use a dual-currency system, a business model that has faced legal challenges in multiple states. These platforms offer games that resemble those found in licensed casinos and offshore betting sites, but instead of using direct monetary wagers, they operate with virtual tokens.
Although players can receive some of these tokens for free, they can also purchase additional tokens with real money. Any winnings from games such as slots, table games, or sports betting can be converted into cash or other rewards. Lawmakers and regulators have raised concerns about this structure, particularly regarding consumer protection issues and the lack of compliance with standard gaming regulations.
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Sweeping Bill to Ban Sweepstakes Casinos
The legislation introduced by Sen. Addabbo takes a broad approach to cutting off support for sweepstakes gaming operations. It specifically prohibits financial service providers, payment processors, geolocation technology companies, gaming content suppliers, platform operators, and media affiliates from conducting business with these platforms. The bill includes penalties ranging from $10,000 to $100,000 per violation and allows for the revocation of gaming licenses for companies that fail to comply. If enacted, the law would be enforced by the state's gaming commission, attorney general's office, and law enforcement agencies.
Lawmakers have expressed concerns about the accessibility of online sweepstakes gaming, particularly to underage users, and the ease with which these platforms bypass consumer protection measures. The bill notes that these operations function outside of New York's regulated gaming framework, avoiding taxation and oversight while posing direct competition to licensed casinos that contribute to the state's economy. Additionally, there are concerns that the lack of regulation could create opportunities for financial crimes such as money laundering.
New York is not the only state taking action against sweepstakes casinos. Maryland's legislature is currently moving forward with a bill to prohibit these platforms, with the state Senate already approving the measure. The bill is now back in the House of Representatives for review, and if passed, Maryland would become the first state to fully outlaw sweepstakes-based online casinos and sportsbooks.
New Jersey lawmakers are also considering similar legislation, with Assemblyman Clinton Calabrese recently introducing a measure to ban sweepstakes gaming despite having previously supported a regulatory approach. Additionally, states such as Connecticut and Mississippi have introduced bills that seek to restrict or ban the operation of these gaming models.
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