New York Lawmakers Officially Ban Sweepstakes Gaming

• A bill to ban dual-currency sweepstakes games is heading to Gov. Kathy Hochul (D)
• The New York Assembly approved the bill Tuesday, days after the Senate approved the bill
• Several sweepstakes associations are demanding Hochul vetoes the bill

New York lawmakers have roundly approved a bill to ban dual-currency sweepstakes games in the Empire State.

The New York Assembly yesterday approved S5935A, just days after the bill also received approval from the Senate, which will officially prohibit online sweepstakes games and revenue from illegal markets, plus set potential fines for operators who do so.

The bill now heads to Gov. Kathy Hochul (D) to potentially be signed into law, but several pro-sweepstakes associations are hoping she opts to veto the legislation.

Coming Down on Sweepstakes

Sen. Joseph P. Addabbo Jr.’s (D-15) bill, S5935A, specifically targets dual-currency sweepstakes games that mirror casino-style games and sports betting.

Addabbo Jr.’s bill provides the following definition of a prohibited online sweepstakes game:

“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 gaming, including but not limited to, slot machines, video poker, table games including but not limited to blackjack, roulette, craps, and poker, lottery games including but not limited to draw games, instant win games, keno, and bingo, and sports wagering.”

Sweepstakes games that do not award cash prizes or cash equivalents will not be prohibited under the law.

The bill sets fines of a minimum of $10,000 or a maximum of $100,000 for an operator or affiliate offering a sweepstakes casino game in the state, or accepting revenues from a sweepstakes casino company.

This comes about two weeks after New York Attorney General Letitia James‘ office sent out 26 cease-and-desist notices to online platforms offering dual-currency sweepstakes games within the state.

Advocate Groups Urging Veto

The Social and Promotional Games Association (SPGA) released a statement strongly urging Gov. Hochul to veto the bill.

“This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation,” said a spokesperson for the SPGA. “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.”

According to the SPGA, the legislation does not contain a definition of what constitutes an offending game, leaving it entirely to the discretion of the New York State Gaming Commission.

Additionally, the Social Gaming Leadership Alliance (SGLA), a coalition of industry leaders advocating for the social online games industry, noted their disappointment at the approval of the sweepstakes banning bill.

“By advancing legislation that was drafted based on fundamental misunderstanding of our industry and aggressively promoted by stakeholders with a competitive interest in shutting down these platforms, New York residents could lose access to popular, free-to-play online games enjoyed by millions. Of particular concern, the discretionary powers handed to the Gaming Commission under this bill could restrict use of a popular marketing tool, hurting businesses and the New York economy in ways lawmakers did not intend,” SGLA Executive Director and former Congressman Jeff Duncan said in a released statement.