Revised Anti-Sweepstakes Casino Bill in New York Advances

An amendment to a New York Senate bill that would restrict online sweepstakes altered accountability for determining what constitutes a "dual-currency system" from lawmakers to the state gaming regulator. 

Senate Bill 5935, sponsored by Sen. Joseph Addabbo, has been amended to allow the New York State Gaming Commission to define the parameters of such systems, which are at the heart of the bill's effort to curb online games that resemble gambling.

The regulation targets so-called online sweepstakes based on a dual-currency model - games in which in-game currency can be awarded or obtained for free by players while other currency, although purchased with money, theoretically could be cashed out in the form of cash equivalents or cash.

The amendment at third reading of the bill strikes off earlier language that exempted games that did not offer cash awards or equivalents from the sweepstakes definition. The bill now attempts to offer a more adaptive regulatory climate that will be able to keep up with the evolving shape of online gambling.

The Senate bill is now tracking Assembly version A6745, carried by Assemblywoman Carrie Woerner. The legislation has been going through committee hearings and shares the same objective with the Senate in stopping the spread of online sweepstakes that mislead legal promotional games with illegal gambling operations.

Enforcement power would be shared between the New York State Gaming Commission, state police, and the office of the Attorney General, who would have authority to investigate potential violations and issue cease-and-desist orders.

Since the state legislature will recess for its 2025 session on June 12, there is little time remaining for legislators to finalize the legislation and reconcile Assembly and Senate versions.

Social and Promotional Games Association Issues Warning

The opposition, including the Social and Promotional Games Association (SPGA), argues that the New York bill is still open to having unintended consequences. SPGA speaks on behalf of operators such as High 5 Entertainment, Blazesoft, and Fliff, who contend the amendment is cosmetic and overlooks industry concerns with the ease of enforcement and room for regulatory overreach.

The SPGA termed the amendment a "political patch meant to appease critics without solving the problem," expressing a long-standing worry that legitimate promotional games could get caught up inadvertently in enforcement measures. Although the new language places the bill more narrowly, opponents continue to worry about loose standards that could be troublesome to operators and companies utilizing standard marketing practices.

Other states have also expressed concerns over collateral damage to traditional promotional schemes. In Louisiana, where a similar sweepstakes casino prohibition bill unanimously passed the Senate, bill sponsor Sen. Adam Bass reaffirmed that old-school reward programs like McDonald's Monopoly, Starbucks rewards, or Marriott loyalty programs were not what the bill aimed at.

In New York, however, the extent of the law might extend to the operators' suppliers. The bill includes language that would also bring enforcement to the suppliers, payment processors, geolocation providers, gaming employees, and investors on sweepstakes websites.