New Jersey Outlaws Sweepstakes Casinos and Proxy Betting

New Jersey has drawn a hard line in the sand against sweepstakes casinos, unlicensed iGaming, and proxy sports betting. On Friday, Governor Phil Murphy signed Assembly Bill 5447 into law, giving state regulators a powerful new toolset to shut down operations they see as illegal gambling.

Good to know

• First offense fines for operators can reach $100,000, with repeat violations hitting $250,000.
• Proxy betting is now explicitly banned for wagers of $1,000 or more.
• The new law also criminalizes using inside information to place a sports bet.

The ban applies to sweepstakes gambling, defined in the legislation as “a promotional, advertising, or marketing event, contest, or game, whether played online or in-person, in which something of value… is awarded” — including prizes earned indirectly through a dual-currency payment system.

There are narrow exceptions. For instance, a sweeps contest can remain legal if it offers a genuine free-play option and any paid entry is tied to the purchase of food, non-alcoholic beverages, or other small items worth under $20. The odds of winning must be identical for free and paid entries.

Tougher penalties and broader enforcement

Under A5447, New Jersey sports betting regulators can now seek injunctions to stop sweeps operators in their tracks. They can also impose fines that escalate sharply for repeat offenders.

The bill doesn’t stop at sweepstakes casinos. It also makes it a third-degree crime to run an unlicensed “online gambling resort” — essentially any website or app where people can wager. The definition of gambling itself has been expanded to include buying, selling, or trading something of value based on the outcome of a contest of chance.

This language could impact prediction markets like Kalshi, which some lawmakers believe are offering sports wagers under a different name. Similar laws have passed this year in states such as Connecticut, showing a growing national trend toward tightening iGaming rules.

Proxy betting and match-fixing targeted

The law also takes direct aim at proxy betting — when one person places a large wager on behalf of someone else for a percentage of the winnings. In New Jersey, placing a $1,000 or larger bet under those conditions is now illegal unless the bettor retains full control over the wager.

Event manipulation is addressed as well, with the definition of illegal “rigging” expanded to cover sports. Bribery connected to fixing a game or performance will now be a crime, as will accepting such bribes.

Another update to the state’s “swindling or cheating” statute bans making bets with inside information or using another person’s gambling account to place wagers.

By pairing the anti-sweeps measure with stricter definitions of gambling crimes, lawmakers have closed several loopholes operators had used to skirt existing laws. With higher iGaming tax rates also recently approved, the Garden State is signaling that its regulated gambling industry will operate on its terms — and its terms only.

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