The New York Office of the Attorney General may have celebrated the shutdown of 26 online sweepstakes casinos in the Empire State, but that hasn’t slowed down lawmakers from continuing to pursue legislation passage that would explicitly ban sweeps gaming.
On the same day that Attorney General Letitia James announced the crackdown on perceived illegal online sweepstakes gambling, the state Assembly Committee on Ways and Means voted 35-0 to advance Assembly Bill 6745.
The proposal was then referred to the Assembly Committee on Rules as lawmakers attempt to push the bill across the finish line before the legislative session ends on June 12.
Assembly advances bill to ban online sweepstakes casinos
Sponsors of Assembly Bill 6745 – and certainly of the Senate’s companion bill in S5935 – praised the attorney general’s actions.
What’s more, they said proposed legislation to ban online sweepstakes casinos would only provide the state with more tools to keep unregulated and illegal gambling out of the state.
While Addabbo’s bill in the Senate has not advanced out of committee, A6745 has taken another step further toward passage, even with the clock running out on the legislative session.
As written, the bill “prohibits online sweepstakes games and revenue from illegal markets,” which have continued to “evade consumer protection, responsible gaming, and anti-money laundering requirements.”
The bill defines online sweepstakes as any online game, contest or promotion that uses a dual-currency system of payment – such as Gold Coins and Sweeps Coins – that players can exchange for any cash prize, award or equivalent.
NY officials rid state of ‘unsecure’ gaming platforms
Late last week, the state’s Office of the Attorney General sent out a press release detailing how regulators identified 26 online sweeps casinos and issued cease-and-desist letters to those operators.
As a result, the release noted, all 26 platforms – which James described as “illegal, dangerous, and can seriously ruin people’s finances – would close up shop in New York.
These “unscrupulous, unsecure, and unlawful” operators – as Brian O’Dwyer, chairman of the New York State Gaming Commission, called them – offered games that resembled slots, tables games and sports betting using virtual currency that could be exchanged for real cash and prizes.
The action to shut down NY sweepstakes casinos, according to Sen. Joseph Addabbo Jr., was all about “protecting New Yorkers” while “working toward a safer, regulated online gaming environment for age-appropriate individuals.”
SGLA emphasizes framework followed by sweeps operators
The Social Gaming Leadership Alliance (SGLA) said in a release that New York officials mischaracterized “social online games that utilize sweepstakes promotions as illegal gambling operations.”
The SGLA emphasized that its members adhere to “established sweepstakes promotional frameworks which are distinct from gambling.”
According to the group, that difference stems from the fact that sweeps offerings “are designed to promote a bona fide service (the play-for-fun social games) and always provide genuinely free participation methods through Alternative Methods of Entry (AMOE), including daily rewards and on-request (such as mail-in) options.”
In response to James’ claims that users can redeem virtual currency for cash prizes and the like, the SGLA said that its partners do not allow players to do such.
“These tokens are used solely to enhance gameplay and cannot be converted to cash,” the SGLA said. “Any prizes awarded through legitimate sweepstakes promotions are separate from and not purchased with these game tokens.”
Optimism remains for the return of sweepstakes casinos to NY
Jeff Duncan, executive director of the SGLA, conceded that his group disagrees with the “characterization” of online sweepstakes gaming.
However, he remained optimistic that these platforms could return to New York under the right circumstances, noting that “we look forward to working with legislators and regulators to develop a comprehensive regulatory structure that protects consumers while preserving innovation.
“We believe there is an opportunity to create a framework that provides appropriate oversight, mandates robust consumer safeguards, and recognizes the legitimate use of sweepstakes promotions.”
Duncan later added:
“We believe productive dialogue can lead to solutions that enhance consumer protection while supporting innovation and economic growth.”
SPGA: New York ‘opted for overreach’
Shortly after James made her announcement, the Social and Promotion Games Association (SPGA) expressed disappointment in the Office of the Attorney General dropping the hammer on its sweepstakes members that follow a “well-established legal framework.”
“Sweepstakes promotions are not gambling under federal law,” the SPGA said in a statement, noting that online sweepstakes operators do not require users to purchase anything to participate.
“Instead of working collaboratively,” the SPGA said, “the state has opted for overreach.”
