Sweepstakes prohibition bill advances in New York
Senate committee on Racing, Gaming, and Wagering issue unanimous backing towards SB 5,935, which would act as a “powerful deterrent” to sweepstakes operators
The New York Senate Committee on Racing, Gaming, and Wagering has passed a bill that would prevent operators, suppliers and other associated companies from offering sweepstakes in the state.
Senate Bill 5935, proposed by Senator Joseph Addabbo, was approved by the New York Senate Racing, Gaming, and Wagering Committee, of which Addabbo is chair, without a single opposing vote.
In turn, the bill is now cleared to advance to the senate floor.
SB 5,935 notes that the sweepstakes vertical evades “consumer protection, responsible gaming, and anti-money laundering requirements to which gambling in New York is otherwise subject” and that the untaxed and unregulated nature of the sector presents “unfair competition” to licensed New York operators.
It also aims to serve as a “powerful deterrent to offshore and domestic illegal online gaming operators from entering the state.”
The bill outlines plans to establish a penalty system for violations, including fines as high as $100,000 and the potential loss of license.
It also grants enforcement authority to the New York State Gaming Commission (NYSGC), state police, and the Attorney General’s office.
Senator Addabbo, who has long been looking to legalize igaming in the Empire State and filed a bill to do so during this legislative session, has expressed his concern over the rise in online sweepstakes.
“We have these online sweepstakes casinos that basically look a lot like casino games, but they go unregulated,” he said.
“Right now, we have a number of states, Connecticutbeing one of them, that basically made it illegal. They kicked out one of their operators. We’re looking to ban these kind of illegal, unregulated gaming sites in New York state.”
Addabbo’s comments are in reference to the recent ruling from Connecticut’s Department of Consumer Protection (DCP) Gaming Division, which saw High 5 Games’ license suspended, while its sweepstakes casino brand, High 5 Casino, faces 1,065 criminal charges.
After an investigation into the company by the DCP, the regulator determined that High 5 Casino was allegedly marketed as a licensed casino, accepting bets from players in the state.
Meanwhile, SB 5,935 has been met with a passionate response from Social and Promotional Games Association (SPGA), the sweepstakes trade body.
“We appreciate New York lawmakers’ formal recognition that social sweepstakes are a legal form of entertainment – you don’t need to outlaw something if it is already illegal,” a SPGA statement read.
“But that’s where our appreciation ends. Albany legislators have no business dictating to New Yorkers what games they can play on their phones.
“This deeply flawed legislation is an affront to personal freedoms, an insult to New York voters, and a colossal waste of government resources.”
Elsewhere in the US, there has been a rise in the amount of action taken against sweepstakes, including in Florida, where lawmakers filed two bills, Senate Bill 1,404 and House Bill 953, both of which aim to prohibit the vertical.
The SPGA has argued that both bills “conflate safe and legal social sweepstakes games with ‘internet gambling’ and ‘internet sports wagering.’”
Similar bills have been introduced in both chambers in Maryland, with SB 860, which received unanimous backing in the form of a 47-0 vote, described as a “dangerous overreach” by the SPGA.
Mississippi lawmakers issued significant support to sweepstakes prohibition bill SB 2,510, but the bill’s progress has stalled since being amended to include plans that would expand the state’s sports betting market.
In New Jersey, Assemblyman Clinton Calabrese’s original bill would have created a regulated sweepstakes market, but he soon U-turned to file legislation to “prohibit sweepstakes model of wagering.”