Senator Joseph Addabbo has filed a bill in New York that seeks to prohibit online sweepstakes casinos.
S 5935, is titled “An Act to amend the racing, pari-mutuel wagering and breeding law, in relation to prohibiting online sweepstakes games and revenue from illegal markets.”
Addabbo has long advocated for regulated online gaming expansion in New York. However, given the legislative hurdles he’s likely to face in granting any legalization, he has instead turned to the prohibition of online sweepstakes casinos.
The purpose of the Senator’s legislation is to “prohibit certain persons from operating, conducting, or promoting certain online sweepstakes games.” He also takes aim at peripheral suppliers who work with companies operating the casinos, adding “or supporting the operation, conducting, or promotion of certain online sweepstakes games.”
The New York State Gaming Commission and State Attorney General will be responsible for denying a person the right to commence or continue operations if a party is found guilty of accepting revenue directly or indirectly derived from online sweepstakes games. They will also be responsible for penalizing those who breach the rules.
Online Sweepstakes Casinos: A Definition
S 5935 also provides a comprehensive definition of online sweepstakes casinos. It is defined as “any game, contest, or promotion that is available on the Internet and/or accessible on a mobile phone, computer terminal, or similar access device, that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize, award, cash or cash equivalents.”
Some analysts have compared the dual-currency system to crypto casinos, where users purchase a digital currency and use it to wager before converting it into fiat (or equivalent). However, with sweepstakes casinos, the digital currency is not tradable or tied to an exchange, so unlike crypto, it does not change in value.
It continues: “and simulates casino-style gaming, including but not limited to slot machines, video poker, table games including but not limited to blackjack, roulette, craps, and poker, lottery games including but not limited to draw games, instant win games, keno, and bingo, and sports wagering.”
The legislation does not include sweepstakes games that do not award cash prizes or equivalents. This exonerates social casinos, although recent litigation efforts in Washington have also brought them under fire.
Addabbo’s proposals include severe monetary penalties and loss/ineligibility for a New York gambling license. The fines would be “of not less than ten thousand dollars, and not more than one hundred thousand dollars” for each violation.
Woerner’s Legislation Could Pave the Way for Crypto
This is the latest piece of legislation in New York, after Assemblywoman Carrie Woerner filed a proposal that could allow operators to accept cryptocurrency.
Woerner’s proposed legislation reads: “Sports wager means cash [or], cash equivalent OR THING OF VALUE that is paid by an authorized sports bettor to a casino or a mobile sports wagering licensee to participate in sports wagering offered by such casino or mobile sports wagering licensee.”
Analysts do not expect Woerner’s legislative efforts to succeed, as they also propose broadening licensing in the Empire State and a lower tax rate depending on the number of legalized operators. Addabbo filed similar legislation in 2023, which ultimately died.
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