State Bill Advances to Shut Down Virtual Coin Gambling in New York

New York lawmakers are taking aim at online sweepstakes casinos and sportsbooks. The state Senate has approved Senate Bill 5935, a measure designed to outlaw unlicensed gambling platforms and ban the use of virtual coins that can be exchanged for cash or prizes.

Good to know

• Senate Bill 5935 passed in the New York Senate and now heads to the Assembly.
• The bill would ban online sweepstakes casinos and restrict businesses from supporting them.
• Violators could face fines up to $100,000 and lose gaming licenses.

The bill would make it illegal to operate or promote online sweepstakes casinos in New York. It also seeks to hold supporting businesses—such as media affiliates and financial institutions—accountable for facilitating access to these gambling platforms.

Senator Joseph Addabbo Jr., who sponsored the bill, has long raised concerns about the unregulated nature of sweepstakes-style casinos. “The guardrails and the safeguards that we painstakingly take efforts to do when we do mobile sports betting or iGaming are not there with most of these sweepstakes casino sites,” Addabbo said in an interview earlier this year.

The move aligns New York with a growing list of states cracking down on these platforms. Connecticut, Louisiana, and Montana have already taken legislative action to block sweepstakes gambling. While New York’s bill still needs approval from the Assembly, the recent Senate vote shows growing momentum for stricter enforcement.

The Senate’s decision follows action from New York Attorney General Letitia James, who sent cease-and-desist letters to more than two dozen sweepstakes casinos and sportsbooks, including platforms like Chumba and Fliff. Her office stated that betting with virtual coins that are redeemable for cash falls under New York’s gambling laws—regardless of how companies label their services.

According to James’ office, the targeted platforms have already responded by halting sweep coin sales in New York. Her message was clear: “New York law prohibits online platforms from offering gambling that involves risking something of value, including virtual coins that can be redeemed for cash or prizes.”

The New York State Gaming Commission is also involved in the wider crackdown. In January, Commission Chair Brian O’Dwyer revealed that staff had referred multiple sweepstakes-related complaints to law enforcement. Following the Attorney General’s announcement, O’Dwyer added, “These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful.”

If passed by the Assembly, S.B. 5935 would introduce penalties ranging from $10,000 to $100,000 per offense and the possible loss of any gambling licenses for violators.

On wednesday, Connecticut became the second state to ban sweepstakes casinos after SB 1235 was signed into law.

The post State Bill Advances to Shut Down Virtual Coin Gambling in New York appeared first on iGaming.org.