Members of the New York Senate last week passed Sen. Joseph Addabbo’s Senate Bill 5935 by a 57-2 margin with four abstentions, and the measure now awaits Gov. Kathy Hochul’s signature.
New York Senate Bill 5935 Outlaws Online Sweepstakes Gaming
SB 5935 amends the racing, pari-mutuel wagering and breeding law, in relation to “prohibiting online sweepstakes games and revenue from illegal markets.” The bill lists stricter penalties and enforcement provisions as well
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 reads.
“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.”
Attorney General Letitia James Shut Down 26 Sweepstakes Casinos
Earlier this month, New York Attorney General Letitia James sent 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.”
SPGA Urges Gov. Hochul To Veto SB 5935
The Social and Promotional Games Association (SPGA) released a statement on Tuesday, urging Gov. Hochul to veto SB 5935, a bill that could potentially “kill investment, stifle innovation, and undermine New York’s position as a national leader for tech and digital entertainment.”
“This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation,” said a spokesperson for the SPGA.
“Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle.”
The SPGA added in its news release that SB 5935 singles out “individual investors and investment firms” for potential criminal penalties if they invest in any form of online gaming that allows a player to exchange any type of currency for a “cash prize, cash award, or cash equivalents.”