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Senate Bill S5935,Willbet Casino - Your Ultimate Online Gambling Hub sponsored by Senator Joseph Addabbo, seeks to prohibit online sweepstakes games that simulate casino-style gaming, including slot machines, poker, and sports wagering.

The legislation’s scope is notably broad, targeting not just game operators but also financial institutions, payment processors, geolocation providers, and media affiliates.

Under the proposed law, any entity found supporting or facilitating online sweepstakes games could face substantial financial penalties.

Violations would result in fines ranging from $10,000 to $100,000 per incident, with potential additional consequences including the loss of gaming licences.

The bill defines online sweepstakes games as internet-based contests utilising a dual-currency system that allows players to exchange virtual currency for cash prizes or equivalents.

Critically, the legislation explicitly excludes games that do not award cash prizes.

The bill argued unregulated sweepstakes platforms pose significant risks, circumventing consumer protection measures, responsible gaming guidelines, and anti-money laundering regulations.

The text of the proposed law said it aims to protect consumers and provide a level playing field for New York’s regulated gaming industry.

Enforcement would be entrusted to multiple state agencies, including the New York State Gaming Commission, state police, and the Attorney General’s office.

These bodies would have broad investigative powers, including the ability to conduct investigations, hold hearings, and issue cease and desist orders.

If passed, the legislation would take effect immediately.

SPGA slams New York bill

In a statement provided to NEXT.io, sweepstakes trade body the Social and Promotional Gaming Association (SPGA) criticised the New York bill.

“As constructed, the bill could criminalise promotional sweepstakes used by small businesses in New York, risking millions in revenue for local shops and restaurants and threatening thousands of jobs in an already fragile economic climate.

“The bill could also outlaw promotional sweepstakes run by major Fortune 500 companies such as AT&T and Starbucks.

“Taylor Swift fans take note: With everything going on in the world, for some reason, New York lawmakers have made it a priority to outlaw the sweepstakes promotions that Marriott used last year to give away packages to the Eras Tour. 

“The correct approach to support innovation, consumer choice, and the economy of New York is sensible regulation and taxation of social sweepstakes games that millions of adults enjoy responsibly and safely.”

The proposed law is the latest twist in the ongoing backlash to sweepstakes casino in the US, with the new year having seen several states legislatures see bans on the activity considered.

Just this week, two bills were tabled in Florida that would ban the activity, building on others floated in Mississippi, Maryland, Connecticut and New Jersey.