A bill that levies new limits for online sweepstakes contests in New York could come up for a vote on the state Assembly floor on Monday, June 16, or Tuesday, June 17. The legislation, having already been approved by the New York Senate, was advanced out of the Assembly’s Rules Committee on Friday, June 13.
Although many companies that could be affected by the bill have already stopped doing business in New York, that isn’t universally the case. Even for those who made preemptive moves to exit New York, there are concerns about similar legislation spreading to more jurisdictions in the United States.
New York S 5935 gets nod from Assembly members
On June 13, the New York Assembly Rules Committee substituted the Assembly companion of S 5935 (A 6745) with S 5935, as S 5935 had been passed by the Senate on June 11. The committee then voted to recommend S 5935 for passage by a 20-9 vote.
S 5935 has not yet been placed on the Assembly floor calendar, but that could happen any time over June 16 and 17. With the bill’s momentum in the waning hours of the 2025 legislative session in Albany, a floor vote seems likely.
There are still numerous potential outcomes of a floor vote, with numerous ramifications for the sweepstakes industry in New York.
Potential outcomes for S 5935 at this juncture
Assuming S 5935 does come up for a vote of the entire Assembly, there are several paths forward. The simplest outcomes are for the Assembly to approve or reject the bill as it advanced from the Rules Committee.
It might not be that simple, however. The possibility remains that the Assembly could approve the bill but with any number of amendments.
In fact, bills that come up for late-session votes are often targets of amendments for two reasons. Legislators attempt to tack on former standalone bills that could not draw requisite support on their own.
In other cases, lawmakers in opposition to proposals deliberately try to add amendments to bills as “poison pills,” expecting the new language will make the entire bill untenable to the majority. Either way, passing S 5935 with new amendments would send the legislation back to the Senate for potential concurrence. In such circumstances, time might be too short to get the bill through, even if the Senate is amenable to changes.
The clock running out on S 5935 wouldn’t mean the issue is dead in New York’s legislature. Bills carry over from odd-numbered to even-numbered years in New York.
Even if that weren’t the case, though, the bill’s sponsor, Sen. Joseph Addabbo, could re-file the bill in the new session. For businesses in the online gambling space operating in New York, all these events bear watching.
Implications for enshrinement of S 5935
If S 5935 gets legislative approval and survives a potential veto from Gov. Kathy Hochul, the new language in New York’s code has ramifications for many enterprises involved in sweepstakes and social gaming in the state. The bill’s tenets have the strongest implications for operators of websites that offer casino-style, sweepstakes-based games and their vendors.
S 5935 attempts to ban such games in New York, targeting sites that offer dual-currency systems. The bill makes fines of up to $100,000 possible for violations.
S 5935’s tenets also criminalize the activities of vendors like geolocation service providers and payment processors working with the operators of such websites. That could prove precarious for vendors, as some of them also provide the same services to licensed online sportsbooks in New York.
That points to greater consequences of the passage of bills like S 5935. Broad disruption of sweepstakes casinos’ access to vital services could hamper their businesses.
Sweepstakes gaming groups oppose S 5935
Many social casino brands have made anticipatory moves to stop serving customers in New York. In early June, New York Atty. Gen. Letitia James confirmed a list of 26 websites that have made such moves.
However, trade associations representing these businesses have not relented in their opposition to S 5935’s potential enactment. Statements from the Social & Promotional Games Association (SPGA), along with the Social Gaming Leadership Association (SGLA), have characterized the proposal as an overreach of the state’s authority and a mischaracterization of the games available on their members’ websites.
The SGLA and SPGA further argue that sweepstakes games are regulated by federal law, superseding state statutes on the issue. If New York enshrines the language of S 5935, that could be a precursor to federal courts finally starting to weigh in on the issue.
New York might be the breaking point for litigation
If S 5935 becomes law, New York wouldn’t be the first US state to enact a sweepstakes casino ban. Connecticut and Montana have already done so.
However, New York’s population dwarfs that of Connecticut and Montana combined, making the state a far more significant market to lose access to. Even if social casino operators don’t challenge the statute in court, their service providers may take up that mantle.
At issue in such a challenge is likely to be New York’s authority to regulate sweepstakes within its borders, with litigants probably claiming federal preemption. Complainants might also aim for S 5935’s classification of sweepstakes-based games as unlicensed gambling.
While many sweepstake casino brands may never return to New York, the intent of such litigation might be to prevent other US jurisdictions from passing bills like S 5935. At this time, the future hangs on whether that bill comes up for a vote on the Assembly floor in Albany.
