New York Governor Enacts Law Banning Sweepstakes Casinos
New Law Targets Sweepstakes Industry in New York
New York has enacted a significant new law that bans sweepstakes casinos, marking a substantial change for this industry within the state. The legislation prohibits sweepstakes operations, particularly those using dual-currency models, from functioning in the Empire State.
Legislative Action and Enforcement
The legislation, known as Senate Bill 5935, was signed into law by Governor Kathy Hochul, signaling the official end of the sweepstakes casino industry in New York. This ban extends not only to the casinos themselves but also to their business partners, including vendors, payment processors, and marketing firms.
Violators of this law face hefty fines ranging from $10,000 to $100,000. Licensed gaming operators who do not comply risk losing their licenses, while unauthorized operators might be barred from obtaining licenses in the future.
Enforcement will be carried out by the New York State Gaming Commission, alongside law enforcement agencies and the attorney general’s office.
The Broader Impact on the Sweepstakes Industry
This new restriction in New York represents a major setback for sweepstakes businesses, which have been under pressure from regulatory authorities for some time. Operators argue that their models do not constitute gambling because of their dual-currency systems and the ability to participate without payment. Nonetheless, regulators classify these activities as unauthorized gambling.
Several states have responded with cease-and-desist orders against major sweepstakes operators or are considering legislative bans. While some states resist such measures, the overall regulatory stance is becoming less favorable towards sweepstakes casinos.
States like Maine and Florida are considering similar bans, with certain lawmakers advocating strongly for prohibition. California has already passed legislation to ban sweepstakes casinos starting in 2026.
Industry supporters argue that banning sweepstakes may cause more harm than benefit. They highlight the economic contributions of the sector and suggest creating a regulated framework similar to traditional gambling regulations. However, lawmakers have largely dismissed these proposals.
