Members of the New York Senate on Wednesday passed Sen. Joseph Addabbo’s Senate Bill 5935 by a 57-2 margin with four abstentions ahead of the June 12 adjournment.
New York Senate Bill 5935 Advances To State Assembly
SB 5935 is now headed to the state Assembly for approval. The measure “prohibits online sweepstakes games and revenue from illegal markets,” and lists stricter penalties and enforcement provisions.
Addabbo’s bill targets any unregulated operator that utilizes “dual-currency” payment systems. The measure also calls for fines of $10,000 to $100,000 per violation along with the loss of a gaming license.
“Online real money ‘sweepstakes casinos’ have recently become widely available in New York over the internet on mobile devices and personal computers, including to minors,” the bill states.
“These products evade consumer protection, responsible gaming, and anti-money laundering requirements to which gambling in New York is otherwise subject. These products and operations are untaxed and unregulated. They present unfair competition to the state’s legal, highly regulated and economically important casinos.”
Sweepstakes Casinos Operate Under Dual-Currency System
Sweepstakes casinos offer casino-style games without the need to wager real money. Instead, players use Sweeps Coins (SC) and Gold Coins (GC) as virtual currencies.
Gold Coins (GC) are purely for in-game use and have no redeemable value. Unlike Gold Coins, Sweeps Coins cannot be bought and can be redeemed for cash, material prizes, or gift cards.
New York law prohibits online platforms from offering gambling that involves risking something of value, including virtual coins that can be redeemed for cash or prizes.
Attorney General Letitia James Shuts Down 26 Sweepstakes Casinos
This latest news comes on the heels of New York Attorney General Letitia James sending cease-and-desist letters to 26 sweepstakes casinos in efforts to prevent the gaming sites from operating in the Empire State.
Websites owned by Virtual Gaming Worlds (VGW) Holdings stopped allowing in-game currency that can be exchanged for real cash prizes on June 2. However, VGW’s three sites — Chumba, Global Poker, and LuckyLand — will allow sweepstakes play to continue until Aug. 1.
“These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful,” said New York State Gaming Commission Chairman Brian O’Dwyer.
“I have been very vocal about the need to crack down on these operations, and I am thrilled that Attorney General James has taken this significant step to eradicate the illegal gambling market. We encourage those of age who wish to gamble to do so with legal operators.”