New York State Senator Joseph Addabbo (D-Queens), who also chairs the Racing, Gaming, and Wagering Committee, has announced plans to ban sweepstakes casinos.
Loophole Allows Sweepstakes Casinos To Operate In New York
This latest development comes after a loophole was discovered that allows these unregulated platforms to operate across the state, exposing younger individuals to gambling risks.
During a recent a podcast series episode on New York State gaming hosted by political news organization City and State, Addabbo addressed his concerns regarding the growing popularity of online sweepstakes casinos.
These sites allow players to engage in social casinos, virtual casino-style games for free, while allowing them to purchase virtual Gold Coins that can later be redeemed for cash prizes.
“One of my primary objectives as Gaming chair is ensuring New Yorkers are protected from gambling operations that have the potential of becoming more problematic without proper legislative action, such as unregulated sweepstakes casino operators,” said Addabbo.
“Many sweepstakes operators are located offshore, making enforcement limited or impossible, and our most vulnerable populations, youth and elderly, are most often targeted, which is why I want to act to address this existing loophole.”
Sweepstakes Casino Players Can Purchase Gold Coins, Sweep Coins
Gold Coins and Sweep Coins are available for players to purchase, but neither currency holds real-world cash value. However, Sweeps Coins can be used to win prizes, including cash rewards, which is essentially still gambling. The online gaming platforms label the games “promotional sweepstakes” rather than casino gambling.
“The use of money to play a game and win more money is simple gambling and should be safely regulated,” added Addabbo, who believes the distinction between sweepstakes casinos and online casinos is misleading.
While players do not directly deposit money into their accounts, they are still spending money to purchase virtual coins, leading them to potentially win real-world prizes.
Addabbo states this loophole presents a danger, particularly for younger people who may be enticed by free-to-play advertising campaigns that lead to spending money on Gold Coins.
“To close this loophole, I will work to ban or incorporate sweepstakes casinos in the state, akin to current laws in Michigan, Idaho, and Washington, and I will push for iGaming as a safe, effective alternative for online casino enthusiasts,” Addabbo said.
“I encourage my colleagues and the Governor to take action against unregulated sweepstakes casinos, while reconsidering the benefits of allowing legal iGaming operators to provide sanctioned services in a popular and ever-growing industry.”
Addabbo Introduced SB2614 In New York
Last month, a New Jersey lawmaker proposed a bill to regulate and legalize sweepstakes casinos in the state.
In addition, Addabbo’s comments come just days after he introduced a bill, known as SB2614, that would allow for online casino and lottery games to be offered in New York.
Addabbo’s bill would allow casinos, video lottery terminal (VLT) operators, sports betting operators, and Native American tribes to apply for iGaming licenses.
The bill sets a tax rate of 30.5% on gross gaming revenue and carries responsible gambling provisions, including a $2,500 annual limit on credit card funding for individual accounts.