New York, California Eye Sweepstakes Bans
Two of the nation’s largest states, California and New York, have taken steps to ban online sweepstakes casinos.
In New York, Senate Bill 5935A, a bill to outlaw sweepstakes-style games, has been approved in the Legislature and sent to Democratic Gov. Kathy Hochul, pictured, for her consideration. New York is the fourth most populous state, with 19.8 million residents.
According to the bill’s lead sponsor, Sen. Joseph P. Addabbo, Jr., D-Queens, chair of the Senate Committee on Racing, Gaming and Wagering, unregulated online sweepstakes games “are designed to look and feel like legitimate gambling platforms, but they are operating outside the law.”
Although online sports betting is legal in New York, online casino gambling is not. Known as iGaming, it allows participants to use cellphones and computers to play traditional casino games such as slots and craps for real money. It is legal in only seven states.
With sweepstakes casinos, participants buy coins with no monetary value and can use those coins to play digital slot machines. Players can redeem sweepstakes cash for real money. These games are occurring in most U.S. states but face a nationwide backlash. In Louisiana, the governor recently vetoed an anti-sweepstakes bill, saying it was unnecessary.
“Sweepstakes casinos pay no gambling tax,” the New York Times reported, “thanks to the loophole they use to avoid being classified as gambling."
Addabbo said these “illegal sites prey on youth, problem gamblers, and everyday New Yorkers, while diverting millions in potential revenue away from legal, taxed, and regulated gaming entities in our state.”
The Social and Promotional Games Association (SPGA) urged Hochul to veto the bill, saying it “threatens to kill investment, stifle innovation, and undermine New York's position as a national leader for tech and digital entertainment.”
“This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation,” the SPGA said in a statement.
“Troublingly, the bill leaves the definition of what constitutes an offending game entirely at the discretion of the State Gaming Commission, an unelected body,” the statement reads.
‘We Will Crush Them’
In the nation’s most populated state, California, with 39.4 million residents, a tribe-backed amendment has been proposed to an Assembly bill, AB831, to prohibit sweepstakes games, according to published reports. The state’s tribes have exclusive rights to certain legal gambling. Sports betting and iGaming are illegal in California, though sweepstakes games are available.
In a post on X, Victor Rocha, editor of Pechanga.net and conference chair of the Indian Gaming Association, vowed his group would “crush the sweeps in California.”
“We will crush them,” he wrote. "That’ll be it for the industry.”
The Social and Promotional Games Association said in a statement it is “deeply troubled by California lawmakers’ decision to attempt a backroom ban on promotional sweepstakes through a controversial ‘gut-and-amend’ maneuver hours before a legislative deadline.”
“This isn’t how sound policy gets made,” the SPGA said. “A last-minute effort to outlaw legal digital games, without public debate, expert input, or economic analysis, sends a chilling message to entrepreneurs, innovators, and investors across the state.”
The SPGA said the bill “is so broadly written that it could outlaw sweepstakes promotions by companies like Marriott, Microsoft, and Starbucks, longstanding marketing tools that use chance-based giveaways to power popular rewards programs.”
In a separate communication, the SPGA noted that although tribal leaders are attempting to abolish sweepstakes games in California, the Yaamava' Resort & Casino at San Manuel, a tribal casino in Highland, California, runs a social casino—PlayOnline—that offers sweepstakes promotions.
