New York has moved closer to banning online sweepstakes casinos after passing through the committee stage and onto the Senate floor.
The Empire State is one of many that is choosing prohibition over legalization. Online sweepstake casinos, social casinos, lottery couriers, and sports events contracts are dominating legislatures across the United States of America.
The New York Senate Racing, Gaming, and Wagering Committee ushered through Senator Joseph Addabbo’s Senate Bill 5935 with minimum fuss. There were two “aye” votes and one “aye without recommendation.”
Senator Pamela Helming voted aye without recommendation. She said she “wholeheartedly agreed with the intent” of the bill but voted without recommendation after noting constituents’ questions.
Addabbo said at the Committee: “We have these online sweepstakes casinos that basically look a lot like casino games, but they go unregulated.”
High 5 Games’ Legal Troubles Highlight the Risks of Unregulated Sweepstakes Casinos
“Right now, we have a number of states, Connecticut being one of them, that basically made it illegal. They kicked out one of their operators,” he continued.
Sen. Addabbo is likely referencing the Connecticut Department of Consumer Protection’s decision to suspend High 5 Games’ online gaming service provider license and press over 1,000 criminal charges against the operator.
The DCP’s investigation found that High 5 Casino was in breach of several parts of the state’s gambling regulation, which currently permits just DraftKings and FanDuel, in partnership with brick-and-mortar casinos, to offer iGaming in the state. It found that High 5 Casino:
- Accepted deposits from 1,100 Connecticut players, totaling over $3 million.
- Permitted 911 players to lose $937,598 collectively.
- Allowed 117 players on the Connecticut Voluntary Self-Exclusion List to wager nearly $300,000
Bryan T. Cafferelli, the Department of Consumer Protection Commissioner, commented: “It is a privilege to hold this license, and we expect our credential holders to take that responsibility seriously. High 5 Games took advantage of their credential to mislead consumers into believing they were participating in gaming on a legal platform when, in fact, they were breaking the law.”
The suspension order served to High 5 Games took effect immediately, meaning its license has been suspended indefinitely. In addition, any High 5 Games content will be removed from the two legal iGaming platforms in the state. Further, the company will face over 1,000 criminal charges, each carrying a penalty of a year’s jail time and a $2,000 fine per violation.
Sen. Addabbo has long advocated for legalized online gambling in New York. He has filed a bill seeking to legalize and regulate iGaming again this year, although industry analysts believe there are still too many hurdles for it to be passed.
SB 5935 defines sweepstakes 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, or any chance to win any price, award, cash or cash equivalents.”
It also excludes social casino that do not breach real-money guidelines, adding an extra line reading: “A sweepstakes game shall not include a game which does not award cash prizes or cash equivalents.”
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