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Opponents of sweepstakes casinos scored perhaps their most notable legislative win to date when the New York Assembly unanimously approved a bill to prohibit the activities of sweepstakes operators and various suppliers that support them.
The Assembly voted 141-0 to pass Senate Bill 5935A on Tuesday (June 17), less than a week after the bill was approved by the Senate and barely 10 days after New York’s Attorney General announced a major crackdown on sweepstakes companies based on existing gambling laws in the Empire State.
If signed into law, New York would become the third state to enact legislation against sweepstakes in 2025.
New York’s legislation may be more significant than that of Montana or Connecticut, however, both due to the state’s size and status as well as the broader scope of the bill.
The bill approved by lawmakers in Albany would expressly prohibit any individuals from operating or promoting any online sweepstakes that replicate casino games, lottery games, bingo or sports betting, and which offer a “dual-currency method of payment” that enables players to swap sweepstakes coins for cash prizes.
In addition, the bill would also prohibit game content suppliers, platform providers, marketing affiliates, financial institutions, investors, payment processors or geolocation service providers from supporting illegal online sweepstakes games.
Violations of the prohibitions would result in financial penalties ranging from $10,000 to $100,000. Operators or suppliers also would automatically be deemed ineligible for a state gaming license, meaning they would not be able to participate in any future online casino market in the state.
Connecticut’s legislation, enacted last week, merely clarifies state laws to prohibit unlimited sweepstakes games that simulate online casinos or sports betting, while Montana’s law tightened state prohibitions on illegal internet gambling to include games played with virtual currencies without specifically mentioning sweepstakes platforms at all.
The New York bill’s sponsor, state Senator Joe Addabbo, told Vixio GamblingCompliance in March that he wanted to “cast a wide net” in prohibiting sweepstakes.
“It’s not just the operator; it’s the suppliers, payment providers, and affiliates. I didn’t want a narrow bill. I wanted a wide-ranging bill,” said Addabbo, a Democrat who chairs the New York Senate’s gaming committee.
Hochul To Have Final Say
After approval by the legislature, the key question now is whether Governor Kathy Hochul will sign bill S.5925A, or instead follow her counterpart in Louisiana in vetoing the sweeping measure.
Sweepstakes proponents are likely to make the same arguments that were cited by Louisiana Governor Jay Landry last week when he vetoed a nearly identical bill to New York’s.
Landry warned that Senate Bill 161 was overly broad and that signing it risked jeopardizing current enforcement actions already being taken by state gaming regulators against illegal online sweepstakes operators based on existing Louisiana law.
Still, the politics of the issue may be different in New York from Louisiana.
Landry is suspected to have been lobbied to veto the Louisiana bill by Jeff Duncan, the former South Carolina congressman who was recently appointed executive director of the Social Gaming Leadership Alliance, representing major sweepstakes operators.
Duncan and Landry both served as Republican members of the U.S. House of Representatives from 2011 to 2013.
In a statement following the New York Assembly vote, the Social and Promotional Games Association (SPGA), a separate sweepstakes industry group, noted Landry’s recent veto and said the broad language of S.5925A targeting investors in sweepstakes companies “sends a chilling message to anyone looking to invest in the next generation of gaming innovation”.
“We strongly urge Governor Hochul to veto the legislation and protect the very spirit of innovation that has made New York a leader in tech, gaming, and entrepreneurship,” the SPGA added.
It may yet be a number of months before the fate of the New York bill is sealed.
Because New York’s legislative session ended on Tuesday, Hochul, a Democrat, will have 30 days to decide whether to sign or veto the bill, or alternatively “pocket veto” the measure by declining to take any action on it.
That 30-day countdown only starts when the bill reaches the governor’s desk, however.
It is fairly common for bills passed in the waning days of the legislative session to be held back for a matter of weeks or months before the legislature then transmits them to the governor.
As a result, New York governors often do not act on legislation approved in June until the final few weeks of the year.
