New York Moves to Ban Online Sweepstakes Casinos

Lawmakers in New York are taking significant action against online sweepstakes-style gambling, as a new bill, Assembly Bill 6745, gains momentum in the state assembly. Led by Assemblymember Carrie Woerner, the bill recently received full backing from the Assembly Racing and Wagering Committee. This notable move aims to outlaw digital platforms that replicate traditional casino experiences through the use of virtual currencies. These platforms often operate in legal gray areas, offering a variety of games such as slots, poker, keno, and even sports betting simulations, without the need for a standard gambling license. AB 6745 intends to put a stop to these operations by categorizing sweepstakes games as online contests that use two types of virtual currencies—typically “gold” for playing and “sweep” coins that can be converted into cash or prizes equivalent to cash.

The proposed law applies strict prohibitions and consequences for various stakeholders, including licensed gaming operators, suppliers, geolocation services, payment processors, employees, and investors involved in these platforms. Violators could face harsh penalties ranging from $10,000 to $100,000 for each infringement and potentially have their gaming licenses revoked. The enforcement of these new rules would fall under the purview of the New York

Companies in the sweepstakes industry have started reacting to these impending regulations. For instance, Real Prize, a prominent sweepstakes platform, has halted its operations in New York, anticipating the new laws. This abrupt cessation leaves users unable to redeem their winnings, causing significant disruption and dissatisfaction among consumers. Other sweepstakes platforms are expected to follow suit, potentially exiting the New York market to avoid similar complications. This legislative move by New York is part of a broader national trend to regulate and control online sweepstakes gambling. States such as Louisiana and Montana have already enacted similar measures, while Illinois, Maryland, and Connecticut are actively considering their own regulatory frameworks. Conversely, attempts to impose such bans have faced resistance or legislative difficulties in states like Mississippi and New Jersey.

Proponents of the New York bill argue that these online sweepstakes sites pose a significant risk to consumers, particularly those susceptible to addiction. The deceptive nature of these platforms, which mimic real-money gambling but operate with minimal regulations, raises serious concerns about consumer protection. With bipartisan support, the bill is now set to be reviewed by the Assembly Codes Committee, as New York seeks to lead the way in safeguarding its residents from the potential harms associated with unregulated gambling platforms. The momentum behind this legislation reflects a growing