New York Gov. Kathy Hochul signed Senate Bill 5935 into law last week, effectively making online sweepstakes casinos illegal in the state. New York becomes the sixth state to pass legislation prohibiting sweepstakes casinos, joining New Jersey, Montana, Nevada, Connecticut, and California.
After passing the New York Senate (where the bill was introduced) and the New York State Assembly by wide margins in June, Hochul had until Dec. 31 to sign or veto S5935. Post-signing, the law went into effect immediately on Dec. 5, meaning any remaining New York online sweepstakes casino operators in the state could face fines.
Numerous sweepstakes casino operators exited New York earlier this year after Attorney General Letitia James sent cease-and-desist orders to 26 platforms. James said in June that all 26 platforms complied and ceased offering sweepstakes games in the state.
Sweepstakes’ dual-currency system barred in New York
The online sweepstakes casino industry experienced major growth over the past few years, with industry net revenue projected to rise from $3.4 billion in 2024 to above $4.6 billion in 2025, according to Eilers & Krejcik Gaming.
But with increased state-level legislative and other legal action against the platforms, the financial outlook going forward is uncertain. Losing a large market like New York will certainly deliver a financial hit to revenues.
Operating on a dual-currency system, online casino platforms allow users to purchase free-to-play coins (often called Gold Coins) and receive as a bonus free Sweepstakes Coins, which can be accumulated and exchanged for prizes, including cash. The sweepstakes model allowed online sweeps platforms to avoid state gaming regulations and taxation, following instead rules for sweepstakes games.
Actions like the one in New York seek to close the legal loophole and remove sweepstakes casinos from their proclaimed “gray-area” legality.
Sweepstakes operators and promoters to face fines in NY
S5935 amends New York’s racing, pari-mutuel wagering, and breeding law to include the prohibition of online sweepstake games, which includes online slots, table games, and sports wagering. The law does not affect sportsbooks offering New York sports betting.
The now-law defines sweepstakes games as “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 cash prize, cash award or cash equivalents, or any chance to win any cash prize, cash award or cash equivalents, and simulates casino-style gaming, including but not limited to, slot machines, video poker, table games, lottery games, bingo, or sports wagering.”
The law gives the New York State Gaming Commission and the Attorney General the authority to levy fines against not only the primary casino operators, but also employees, investors, board members, service providers, media affiliates, and payment processors who are deemed to have supported “the operation, conduct, or promotion of online sweepstakes games within the state of New York.”
Fines for supporting sweepstakes casino operations in New York range from between $10,000 and $100,000 for each violation. Those found in violation of the law may also become ineligible for a state gaming license. Fines are to be collected by the state gaming commission and deposited into New York’s commercial gaming revenue fund, where it will be distributed “for problem gambling education and treatment purposes.”
Prohibition could help pave the way for iGaming in New York
The legislation was introduced by State Sen. Joseph Addabbo Jr., who chairs the NY Senate’s Racing, Gaming and Wagering Committee.
Addabbo has been spearheading legislative efforts in recent years to legalize real-money New York online casinos.
When Addabbo announced plans to introduce the sweepstakes casino prohibition bill in January, he also mentioned legalizing and regulating iGaming, suggesting that it was the best way to keep New Yorkers from using unlicensed, illegal platforms.
“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. I encourage my colleagues and the governor to take action against unregulated sweepstakes casinos, while reconsidering the benefits of allowing legal iGaming operators to provide sanctioned services in a popular and ever-growing industry.”
Addabbo also introduced S2614 at the start of this year’s session, which, if passed, would have allowed for the legalization, regulation and taxation of iGaming. The bill was introduced in the Senate and sent to the Racing, Gaming and Wagering Committee, but it failed to move out of the committee in 2025. The bill is expected to be taken up again in 2026, which is the second year of the NY Legislature’s biennium cycle.
