New York Senator Looking to Ban Sweepstakes Casinos

In recent months, online sweepstakes casinos have caught the fancy of U.S. recreational casino players in 40+ states, including New York. These types of online casinos offer casino players an opportunity to play online casino games of chance without having to risk their hard-earned cash. That's not sitting well with proponents of standard online casinos in New York, who want to legalize such access in the next year or two.

NY Senator Joseph Addabbo Takes a Stand

Online casino legislation followers will know that Senator Joseph Addabbo has been a leading proponent of online casino legislation in New York for years. His name has been found on key bills over the last three years. Now, he has put his name on SB 5935, a bill that seeks to prohibit the use of online sweepstakes casinos by people residing in New York.

Choosing to attempt to ban sweepstakes casinos as opposed to regulating them, Addabbo would appear to want to decrease any possible competition for standard online casinos in the future. It is worth noting that players using sweepstakes casinos can win prizes, including cash, by simply purchasing what are referred to as "Sweepstakes coins." Therein lies the heart of the Senator's argument for banning said casinos.

In the eyes of regulators all over the nation, gold and sweepstakes coins are seen as digital or virtual currencies. That creates a gray area because virtual currencies are being used to create the possibility of cash prizes. Since virtual currencies have not been legalized in New York, that's the hill that Addabbo has decided to stand on.

What's in the Bill?

As is usually the case, the devil is in the details. Here are a few details offered in the bill:

• It would ban sweepstakes games that offer sweepstakes coins that can be converted into prizes and cash


• Gold coin gaming would still be allowed since gold coins can only be redeemed for more casino play


• No business or individual will be permitted to transact business if the payment method involves the use of money secured via online sweepstakes games


• The penalty for accepting such payments would range from $10K to $100K per violation, and the loss of their casino gaming license if the payment was accepted by a licensed New York retail casino

The Social and Promotional Games Association (SPGA) is a trade organization that advocates for sweepstakes casinos throughout the nation. They have formally condemned Senator Addabbo's bill on the basis it could harm small businesses and infringe on the rights of recreational online gamblers.

It's noteworthy that neighboring New Jersey has decided to take a different approach. Instead of trying to ban sweepstakes casinos, they are considering labeling them as real-money gambling operators, forcing them to go through the state's online casino licensing process.

In both cases, the nation's eyes will be on the results. What happens in New York and New Jersey could set standards for other states in the coming months.