New Jersey Governor Signs Sweepstakes Prohibition Into Law

• Gov. Jim Murphy (D) has signed legislation into law to prohibit dual-currency sweepstakes games in the Garden State
• The legislation still allows for sweepstakes games which participants receive entry through the purchase of food or non-alcoholic beverages
• The Social Gaming Leadership Alliance has expressed disappointment in the legislation

New Jersey is the latest state to prohibit dual-currency sweepstakes games.

Gov. Phil Murphy (D) signed legislation into law to ban dual-currency sweepstakes, set fines and penalties for those who engage in such, and criminalize proxy betting in the Garden State.

The governor signed Rep. Clinton Calabrese’s (D-36) bill, A5447, and Sen. John J. Burzichelli’s (D-3) bill, S4282, into law. Both pieces of legislation were approved by the Assembly and Senate in late June.

Latest State to Ban Sweepstakes Games

New Jersey is the fifth state to pass legislation to prohibit sweepstakes games.

Under the legislation, sweepstakes are defined as “promotional, advertising, or marketing event, contest, or game, whether played online or in-person, in which something of value, such as a prize or prize equivalent, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.”

The legislation, however, allows companies to host sweepstakes games in which participants receive entry through the purchase of food or non-alcoholic beverages.

The legislation also sets firm fines and civil penalties for operators offering unlawful gambling operations in the state. A first offense will result in a fine of $100,000, while a fine of $250,000 will be assessed for every subsequent offense.

Additionally, for each cease-and-desist order ignored by an operator, regulators will be able to assess a $25,000 fine for each violation.

Legislation Also Bans Proxy Betting

The approved legislation also specifically criminalizes proxy betting in the state. According to the proposed legislation, the bill makes it illegal to engage in proxy betting in which “a person risks property with a value of $1,000 or more, having agreed to pay 10% or more of the proceeds of the gambling activity to another.”

If found to be engaging in such behavior, a resident will be guilty of a disorderly persons offense.

A person who conspires to engage in proxy betting is also guilty of a disorderly persons offense.

SGLA Condemns Sweeps Prohibition

The Social Gaming Leadership Alliance (SGLA) condemned Gov. Murphy’s decision to sign the legislation into law. The alliance stated that many free-to-play online social games will now be prohibited through the new legislation.

“Lawmakers in New Jersey have completely ignored their own constituents and enacted a ban that voters oppose,” said Jeff Duncan, SGLA Executive Director and former Congressman. “This law is a textbook example of government overreach that strips away entertainment choices from adults who should be free to make decisions about their own entertainment.”

The SGLA noted it will continue to oppose similar pieces of “misguided legislation in other states.”