The Social Gaming Leadership Alliance (SGLA) on Wednesday released new economic modeling revealing that online social games within the sweepstakes promotions industry contribute more than $230 million annually to New York’s economy.
SGLA Urges New York Governor To Veto Senate Bill 5935
A veto of legislation (Senate Bill 5935) currently under consideration by Governor Kathy Hochul would preserve social gaming in the Empire State while unlocking more than $80 million in additional new annual tax revenue.
“Governor Hochul faces a clear choice: Embrace smart regulation that protects consumers and generates new revenue or ban a thriving, responsible industry and eliminate hundreds of millions of dollars in economic benefits,” said Jeff Duncan, executive director of the SGLA.
“We urge the Governor to veto this bill and support a framework that ensures these games are safe, accessible and beneficial to New Yorkers.”
The SGLA cited key findings from the economic analysis, conducted by industry research firm Eilers & Krejcik. The research shows that in 2024 online social games with sweepstakes promotions contributed:
- $230 million+ in annual economic contribution to New York
- $135 million+ in interchange fees to New York-based card issuing companies
- $15 million+ in payment processing and card network fees to NY-based companies like Mastercard and American Express
- $44 million+ in affiliation deals
- $38 million+ in household earnings through New York-based jobs at companies that work with the industry
Sweepstakes Promotions Contribute To State Revenue
Thanks to modernized laws to regulate and tax the industry, the SGLA added that online social games with sweepstakes promotions could bring at least $80 million in potential new state revenue each year:
- $7-13 million from operator registration fees
- $30-68 million from a tax on player purchases
- Additional revenue from advertising, brand partnerships, and expanded market access
More importantly, an overwhelming number of voters are against banning social gaming.
A recent nationwide survey found that 84% of Americans support modernizing laws to regulate and tax online social games. Voters want lawmakers focus on pressing issues like inflation and the high cost of living, health care, and immigration, not banning free-to-play games.
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.”