New York Senate Votes to Ban Online Sweepstakes Casinos

Senator Joseph Addabbo Jr.’s Senate Bill 5935A, a bill to prohibit online sweepstakes casinos in the Empire State, was overwhelmingly approved by the Senate and now moves to the House.

Safeguarding Sportsbooks

Online sweepstakes casinos pay no taxes to the states in which they operate, and many state lawmakers, including those in New York, are doing their best to have these dual-currency casinos banned in their respective states. SB 5935A is just one such bill with that in mind, where the New York Senate recently voted 57-2 to approve Senator Joseph Addabbo Jr.’s measure. It now takes residence in the House Ways and Means Committee.

“The guardrails and the safeguards that we painstakingly take efforts to do when we do mobile sports betting or iGaming are not there with most of these sweepstakes casino sites,” Addabbo said in a March interview.

During Wednesday’s Senate vote, Addabbo stated, “They’ve (online sweepstakes casinos) been targeting minors and have been allowing people to game illegally. We’re taking a good step to avoid that.”

Addabbo has been a champion of gaming in the state and noted that iGaming could be coming to New York in a recent comment made about the online sweepstakes industry.

“Until we legalize online gaming in New York, we do not want the illegal market to expand, to grow, to target minors or those that have problems,” he said, noting that fines collected would fund problem gambling programs.

As of this moment, New York has one of the most successful mobile sports betting markets in the nation and has made billions due to its 51% tax on sportsbooks’ revenues. And when iGaming, also known as online casino gambling, is legalized, Addabbo wants the market to be free of sweepstakes companies eager to collect the same gambling dollar as its licensed competitors, who pay their fair share to the state.

Cease-and-Desist

It was only last week that Attorney General Letitia James issued 26 cease-and-desist letters to online sweepstakes casino operators who are marketing within New York’s borders. James targeted several popular sweepstakes providers, such as Chumba, Fortune Wheelz, and Global Poker, along with 23 others operating in the Empire State.

“Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” James said. “I thank the New York State Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.”

Senator Addabbo was more than happy to support the Attorney General’s effort and last week said, “These so-called sweepstakes casinos not only put individuals at risk of fraud and financial exploitation, but they also create dangerous pathways for gambling addiction, especially among minors. This is not about taking away anyone’s livelihood; it’s about protecting New Yorkers and working toward a safer, regulated online gaming environment for age-appropriate individuals.”

The chairman of the New York State Gaming Commission, Brian O’Dwyer, described online sweepstakes operators as “unscrupulous, unsecure, and unlawful.”

However, the Social and Promotional Gaming Association, a trade organization for online sweepstakes casinos, did not share the same enthusiasm.

“Sweepstakes promotions are not gambling under federal law and are legally permitted in the overwhelming majority of U.S. states, including New York. Despite multiple attempts to engage directly with New York lawmakers and regulators, our outreach has gone ignored. Instead of working collaboratively to establish clear, modern rules for platforms that offer free-to-play games and do not require a purchase to win, the state has opted for overreach,” the organization countered.