The New York Senate Racing, Gaming, and Wagering committee officially advanced a bill, S5935, which moves to prohibit sweepstakes gaming in the state. Even though the bill isn't scheduled for a hearing yet, the passing of it by the New York Senate committee is a vital step in the fight to make social and sweepstakes casinos and sportsbooks illegal in NY.

A bill that would ban sweepstakes gaming in New York took a significant step forward on Tuesday, receiving a favorable vote in the Senate Racing, Gaming, and Wagering Committee. The committee unanimously passed Senate Bill S5935, moving it to the Senate floor for further consideration.

The legislation, introduced by committee chairman Senator Joseph Addabbo, aims to crack down on controversial online social casinos and sportsbooks that operate under a sweepstakes model. Although the bill has not yet been scheduled for a hearing on the Senate floor, this advancement marks an important step in the push to make such platforms illegal in the Empire State.

Targeting online sweepstakes gaming

The proposed legislation, titled S5935, seeks to "prohibit online sweepstakes games and revenue from illegal markets" while establishing enforcement measures and penalties. The bill targets gaming platforms that use a "dual-currency" system, which has drawn scrutiny from multiple states.

Sweepstakes casinos operate similarly to traditional online gaming platforms, offering slots, table games, and even sports betting. But while players can access some virtual coins for free, they can also purchase additional currency with real money. Winnings from these games can often be exchanged for cash or prizes, creating a grey area in gambling regulation.

The bill not only aims to outlaw sweepstakes gaming but also holds payment processors, financial institutions, geolocation providers, media affiliates, and gaming content providers accountable for supporting such operations. Under S5935, violations could result in fines ranging from $10,000 to $100,000, along with the potential loss of a gaming license. The gaming commission, law enforcement agencies, and the attorney general's office would be responsible for enforcing the law if the bill passes.

Growing legislative support

A companion bill has also been introduced in the New York State Assembly by the chair of the Assembly's Racing, Gaming, and Wagering Committee, Carrie Woerner. However, that bill has not yet progressed out of committee.

Senator Addabbo has been vocal about the need for regulatory action against these online platforms. The bill states that online sweepstakes casinos have become widely available in New York through personal computers and mobile devices, often making them accessible to minors. Lawmakers argue that these operations sidestep consumer protection measures, responsible gaming requirements, and anti-money laundering regulations. Additionally, because they are unregulated and untaxed, they pose unfair competition to New York's legal and highly regulated gambling industry.

Nationwide crackdown on sweepstakes casinos

New York is not alone in its efforts to ban sweepstakes gaming. Several other states have recently introduced similar measures.

In Maryland, lawmakers are even closer to outlawing online sweepstakes casinos and sportsbooks. The state's Senate recently passed a bill that is now being considered in the House of Representatives. If approved, Maryland would become the first state to officially ban this form of gaming.

New Jersey has also entered the debate, with Assemblyman Clinton Calabrese filing a bill to prohibit sweepstakes casinos. This move comes less than two months after Calabrese had initially proposed legalizing them. Meanwhile, lawmakers in Mississippi and Connecticut have also introduced legislation aimed at shutting down these platforms.

As more states take action against sweepstakes gaming, the industry will be watching closely to see if New York follows through with a full ban. If S5935 advances to the Senate floor and passes, it could have a lasting impact on the future of online gaming regulations in the state and beyond.