The new law targets online platforms that operate a “dual-currency” system, allowing users to purchase virtual tokens that can later be exchanged for money or rewards
The New York Senate Racing, Gaming, and Wagering Committee has given its full support to a bill that aims to outlaw online sweepstakes gaming. The committee’s approval moves the proposal to the Senate floor for more discussion. Senator Joseph Addabbo introduced the bill known as S5935. It looks to prohibit sweepstakes-style online gaming and also block money tied to unregulated gambling markets.
Proposed Law Targets Online Gambling Loophole and Its Financial Backers
The new law aims at online platforms that use a “dual-currency” system where people buy virtual tokens they can exchange for money or rewards later. These platforms often run casino-like games without the rules that apply to regular gambling businesses.
The bill does not just ban these gaming sites. It also punishes banks, payment companies, location services, and game content providers that help these sweepstakes work. If it becomes law, those who break it could pay big fines from $10,000 to $100,000 for each offense. They might even lose their gaming licenses. The New York State Gaming Commission, the state’s Attorney General’s office, and police would work together to enforce this law.
Senator Addabbo stressed that these platforms have a big impact on younger users and that they can get to them on their phones and computers. The lawmakers behind the bill say these companies do not follow rules to protect people, promote safe gambling, or stop money laundering. This puts both users and New York’s regulated gambling businesses at risk.
Statewide Bans on Sweepstakes Casinos Gain Momentum across the US
New York’s push is part of a nationwide clampdown on sweepstakes gaming that is picking up steam. In Maryland, lawmakers have moved forward with similar rules, as the Senate said yes to a ban that the House of Representatives is now looking over.
In New Jersey, Assemblyman Clinton Calabrese is now trying to outlaw sweepstakes casinos, which is a big change from his earlier attempts to make the industry legal. Connecticut, Florida, Mississippi, and Nevada have also put forward plans to deal with these operations.
Senator Addabbo mentioned Connecticut‘s recent move against High 5 Games, a company accused of tricking consumers into thinking they were gambling on an approved platform. Connecticut officials have acted putting the company’s license on hold and seeking criminal charges.
Despite growing support for new laws, the suggested ban has met opposition from business groups. The Social and Promotional Games Association (SPGA), which speaks for those with a stake in sweepstakes gaming, has criticized the bill. The group claims that the law misrepresents sweepstakes gaming and was rushed through the committee without enough discussion. In a public statement, the SPGA said that the bill goes too far and might hurt New York’s economy by getting rid of a legal form of entertainment.
As the bill heads to the Senate floor, people expect the argument to heat up. Those in favor see the bill as a must to safeguard consumers and keep New York’s regulated gaming industry honest. Those against it warn it could hurt the economy and limit personal freedoms. How this law effort turns out might set an example for other states thinking about banning sweepstakes gaming too.
