- Joined
- Mar 31, 2005
A newly introduced bill in the New York State Senate aims to ban online sweepstakes games that simulate casino-style gambling, imposing stringent penalties not only on operators but also on financial institutions, payment processors, geolocation providers, and media affiliates.
Senate Bill S5935, sponsored by Senator Joseph Addabbo, seeks to prohibit internet-based sweepstakes games that use a dual-currency system, allowing players to exchange virtual currency for cash prizes or equivalents. The bill explicitly excludes games that do not offer cash prizes.
Violations of the proposed law could result in hefty fines ranging from $10,000 to $100,000 per incident, with potential additional consequences such as the loss of gaming licences. The bill argues that unregulated sweepstakes platforms bypass consumer protection laws, responsible gaming guidelines, and anti-money laundering regulations, posing a significant risk to New Yorkers.
Enforcement would be carried out by the New York State Gaming Commission, state police, and the Attorney General’s office. These agencies would have broad investigative powers, including the authority to conduct inquiries, hold hearings, and issue cease and desist orders. If passed, the legislation would take effect immediately.
The proposed ban has sparked criticism from industry groups, including the Social and Promotional Gaming Association (SPGA). In a statement, the SPGA warned that the bill could unintentionally criminalise promotional sweepstakes used by small businesses, potentially jeopardising millions in revenue and thousands of jobs. The organisation also noted that the bill could outlaw promotional sweepstakes run by major companies such as AT&T and Starbucks.
“As constructed, the bill could outlaw promotions like those used by Marriott last year to give away packages to Taylor Swift’s Eras Tour,” the SPGA stated. “The right approach is to regulate and tax social sweepstakes games responsibly rather than banning them outright.”
New York's proposed legislation reflects a broader trend in the U.S., with several states, including Florida, Mississippi, Maryland, Connecticut, and New Jersey, also considering bans on sweepstakes gaming this year.
Senate Bill S5935, sponsored by Senator Joseph Addabbo, seeks to prohibit internet-based sweepstakes games that use a dual-currency system, allowing players to exchange virtual currency for cash prizes or equivalents. The bill explicitly excludes games that do not offer cash prizes.
Violations of the proposed law could result in hefty fines ranging from $10,000 to $100,000 per incident, with potential additional consequences such as the loss of gaming licences. The bill argues that unregulated sweepstakes platforms bypass consumer protection laws, responsible gaming guidelines, and anti-money laundering regulations, posing a significant risk to New Yorkers.
Enforcement would be carried out by the New York State Gaming Commission, state police, and the Attorney General’s office. These agencies would have broad investigative powers, including the authority to conduct inquiries, hold hearings, and issue cease and desist orders. If passed, the legislation would take effect immediately.
The proposed ban has sparked criticism from industry groups, including the Social and Promotional Gaming Association (SPGA). In a statement, the SPGA warned that the bill could unintentionally criminalise promotional sweepstakes used by small businesses, potentially jeopardising millions in revenue and thousands of jobs. The organisation also noted that the bill could outlaw promotional sweepstakes run by major companies such as AT&T and Starbucks.
“As constructed, the bill could outlaw promotions like those used by Marriott last year to give away packages to Taylor Swift’s Eras Tour,” the SPGA stated. “The right approach is to regulate and tax social sweepstakes games responsibly rather than banning them outright.”
New York's proposed legislation reflects a broader trend in the U.S., with several states, including Florida, Mississippi, Maryland, Connecticut, and New Jersey, also considering bans on sweepstakes gaming this year.
