With time running short, legislation to ban sweepstakes casinos in New York was passed by the state Assembly on Tuesday, sending it to Gov. Kathy Hochul to sign into law.
Senate Bill S5935A, authored by Sen. Joseph P. Addabbo Jr., targets dual-currency sites that offer cash and prizes for game play. Specifically, the bill would:
“prohibit certain persons from operating, conducting, or promoting certain online sweepstakes games or supporting the operation, conduct, or promotion of such games. The bill also grants authority to the New York State Gaming Commission and the Attorney General to enforce penalties against violators.”
SB S5935A won Senate approval last week.
Assembly unanimously passed legislation
The bill passed unanimously in the Assembly, 141-0. The measure comes in the wake of the state’s attorney general, Letitia James, cracking down on sweepstakes casino operators. On June 6, James issued cease-and-desist letters to 26 operators she claimed were acting outside the law.
“New York law prohibits online platforms from offering gambling that involves risking something of value, including virtual coins that can be redeemed for cash or prizes. Online sweepstakes casinos are not subject to audits and other regulatory oversight by the state to ensure that games are not rigged, putting New Yorkers at risk.”
As a result, big-name sweeps operators like Chumba, Ding Ding Ding, High 5 Casino, and Luckyland are no longer allowed to operate in New York State.
Hochul is expected to sign SB S5935A.
Concerns from the industry
While the bill enjoys broad legislative support, one industry association is speaking out against it.
A Social and Promotional Games Association spokesperson issued a statement on Wednesday.
“This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation. Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle.”
The release also points out that the measure allows the New York State Gaming Commission, whose members are appointed rather than elected, to determine what constitutes an offending game. It quoted an unidentified “New York-based early investor”:
“If this is how the state treats emerging models, it’s hard to imagine backing a founder who wants to innovate here.”
Following other states
Should the bill pass, New York would join Connecticut, which just passed Senate Bill 1235 last week, as well as Montana and Nevada, in passing laws curtailing sweeps play.
In Louisiana, the legislature attempted a sweepstakes casino ban but was thwarted by Gov. Jeff Landry. He explained his veto last week in a letter. noting the bill was “a solution in search of a problem that is already being solved by our current system.”
Hochul’s signature may yet be a ways away as bills can be held up for weeks before being sent along to the governor for signature. Once on her desk, Hochul will have 30 days to make a decision and sign S5935A into law.
If this process does indeed drag on, we may not have a decision on NY sweepstakes casinos until well into the fall.
