New York May Ban Sweepstakes Casinos as SB 5935 Heads to Governor

New York may soon add itself to the list of states cracking down on sweepstakes casinos. Lawmakers have pushed Senate Bill 5935 through the Assembly, moving it one step closer to becoming law. Now, all eyes are on Governor Kathy Hochul, who will decide whether to give the bill final approval.

Good to know

• SB 5935 could make New York the third state to ban sweepstakes casinos.
• The bill allows criminal penalties against backers of certain online game models.
• FanDuel started under similar unregulated conditions now under fire.

The bill targets online platforms that use virtual currencies redeemable for cash or similar value. If approved, it would allow the State Gaming Commission to determine what games fall under the law’s scope, leaving critics concerned about how broadly the law might be enforced.

One of the loudest voices opposing the bill is the Social and Promotional Games Association (SPGA). A spokesperson warned that the bill could have far-reaching effects, stating, “This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation.”

Supporters of sweepstakes casinos argue that the legislation misunderstands how these platforms operate. Jeff Duncan, executive director of the Social Gaming Leadership Alliance (SGLA), expressed concern about enforcement and legal overreach. “Legislators raised legitimate questions about how this law would be enforced, whether federal law takes priority, and potential unintended consequences for widespread promotional activities – questions that remain unanswered because the bill was rushed through too quickly,” he said.

Duncan also criticized the law’s implications for digital entertainment: “By blurring the line between lawful sweepstakes promotions and illegal gambling, this legislation threatens a vibrant digital-entertainment sector while offering players no safer alternatives.”

Earlier this month, New York Attorney General Letitia James issued cease-and-desist letters to 26 operators in the sweepstakes space. Some of the biggest names affected included VGW, the company behind Chumba Casino, LuckyLand Casino, and Global Poker. Those operators have since exited the New York market.

FanDuel was also mentioned in the discussion. SPGA pointed out that it, like many gaming platforms today, began as an unregulated idea. “Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle,” said the organization.

If signed, SB 5935 would place New York alongside Montana and Connecticut, which have already enacted similar restrictions. The debate continues, but the decision now rests with the governor.

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