New York Senate Advances Bill to Ban Online Sweepstakes Gaming
The New York State Senate is progressing with legislation aimed at banning online sweepstakes gaming, targeting platforms that operate in a legal gray area by simulating casino-style experiences without traditional gambling regulations.
Legislative Details
Senate Bill S5935, introduced by Sen. Joseph Addabbo, seeks to prohibit online sweepstakes games that utilize a “dual-currency system.
” This system allows players to use virtual currencies, often acquired for free or through purchase, which can then be exchanged for cash prizes or equivalents. The bill defines such games as any online contest or promotion that enables the player to exchange virtual currency for cash or cash equivalents, effectively mimicking traditional gambling activities.
The legislation also extends to entities supporting these games, including financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates. Violators could face fines ranging from $10,000 to $100,000 per violation and potential loss of gaming licenses. Enforcement authority is granted to the New York State Gaming Commission and the Attorney General’s office.
Amendments and Regulatory Oversight
An amendment to the bill allows the New York State Gaming Commission to define what constitutes a “dual-currency system.
“This change provides regulators with discretion to determine which platforms fall under the ban, ensuring that the law adapts to evolving gaming models. The amendment replaced previous language that excluded games not awarding cash prizes or equivalents, thereby broadening the scope of the legislation.
Companion Legislation and Legislative Process
A companion bill, Assembly Bill A6745, introduced by Assemblywoman Carrie Woerner, mirrors the Senate version and has been approved by the Assembly Racing and Wagering Committee. Both bills are moving through their respective chambers, with lawmakers aiming to finalize the legislation before the session adjourns on June 12.
Industry Response and Broader Context
The proposed ban has elicited responses from various stakeholders. The Social and Promotional Gaming Association (SPGA), representing sweepstakes gaming operators, criticized the amendment, arguing that it grants excessive power to regulators and could negatively impact legitimate promotional activities.
New York’s legislative efforts align with a broader national trend of scrutinizing online sweepstakes gaming. States like Louisiana and Montana have advanced similar bans, reflecting growing concerns over unregulated gaming platforms that resemble traditional gambling without adhering to established regulations.
Conclusion
As New York moves closer to enacting a ban on online sweepstakes gaming, the outcome will have significant implications for the gaming industry and regulatory landscape. The legislation aims to close loopholes that allow unregulated gaming platforms to operate, ensuring consumer protection and aligning with the state’s broader gambling policies.