The New Jersey Senate State Government, Wagering, Tourism, & Historic Preservation Committee approved Senate Bill 4282 on Thursday. The bill would ban unlawful gambling operations in the Garden State, which would apply to sweepstakes casinos.
SB 4282 prohibits the sweepstakes model, establishes new penalties for unlawful gambling operations and practices, and directs the Division of Consumer Affairs and Division of Gaming Enforcement to enforce penalties.
“Sweepstakes” is defined as “a promotional, advertising, or marketing event, contest, or game, whether played online or in person, in which something of value, such as a prize or prize equivalent, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.”
New Jersey Senate Bill 4282 Expands The Definition Of Gambling
The measure also expands the definition of “gambling” within the criminal statutes to include “the buying, selling, or trading something of value upon an agreement or understanding that the actor will receive something of value in the event of a certain outcome in a contest of chance.”
However, the bill does create an exception to the sweepstakes prohibition, if:
- There exists a method of entry to participate in the sweepstakes at no cost to the participant;
- Any method of entry that is not free to the participant is ancillary to the purchase of food, non-alcoholic beverages, or other merchandise not exceeding $20 in value or such other amount to be determined by the Director of the Division of Consumer Affairs in the Department of Law and Public Safety;
- Items of merchandise will not include coins, tokens, or online credits that have no value other than permitting sweepstakes entry or that are able to be exchanged for money or merchandise from the sweepstakes operator or an affiliated company; and
- Sweepstakes entry form or the website or application used to enter an online or telephone sweepstakes clearly discloses to participants: the rules of the sweepstakes and the odds of a winning any and all prizes.
Any person or entity found in violation would be liable to a civil penalty of not more than $100,000 for the first offense and not more than $250,000 for the second and each subsequent offense.