New York State Gaming Commission Chair Brian O’Dwyer hinted earlier this year that sweepstakes operators should consider leaving the Empire State, as a potential crackdown could soon be coming in the months ahead. On Monday, O’Dwyer suggested that a crackdown might be imminent.
“I am concerned by the rise in the so-called sweepstakes casinos, wherein it may appear that online prizes are being offered for free when they are not,” O’Dwyer said during a commission meeting.
“The commission is addressing this issue with the help of other agencies. Further announcements on this will be coming in the near future and I expect to have further announcements by our April meeting as to what actions commission and state will be taking.”
Because of the legalization of sports betting and growth of online casinos, lawmakers and gaming regulators are no longer giving sweeps operators a pass. Michigan and Maryland recently sent cease-and-desist letters to offshore casinos and social gaming companies.
New York politicians are also pursuing legislation that clarifies the “dual-currency” system used by sweeps to offer casino-style products does not automatically make them free from local gambling restrictions, even with the “no purchase necessary” business model.
New York Senate Racing, Gaming, And Wagering Committe Unanimously Passed S5935
Last week, the New York Senate Racing, Gaming, and Wagering Committee unanimously passed S5935, moving the legislation to the Senate floor, according to Howard Glaser, global head of government affairs at Light & Wonder.
Introduced by committee chairman and Sen. Joseph Addabbo, the bill “prohibits online sweepstakes games and revenue from illegal markets,” and lists penalties and enforcement provisions.
S5935 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.”
The Social and Promotional Games Association, an industry group for the online sweeps industry, has pushed back on the New York bill, calling it “deeply flawed legislation [that] is an affront to personal freedoms, an insult to New York voters, and a colossal waste of government resources.”
“The correct approach to support innovation, consumer choice, and the economy of New York is sensible regulation and taxation of social sweepstakes games that millions of adults enjoy responsibly and safely,” the Social and Promotional Games Association said earlier this month.