An effective ban on social- and sweepstakes-based casino-style gaming is just a signature from Gov. Kathy Hochul away from becoming law in New York. The bill to affect that change received approval from the state Assembly on Tuesday after previously passing the state Senate.
New York would become the most populous state, and that by a long shot, to enact such restrictions on social and sweepstakes online casinos if this proposal does get enshrined. While many of the companies operating such websites have already stopped doing business in New York, Hochul’s signature could set an unfavorable precedent for these enterprises.
Assembly moves S 5935 forward
After the New York Senate advanced S 5935 on June 11, the bill faced a time crunch to get to Hochul’s desk before the session ended. Those concerns were abated on Tuesday as the Assembly returned the bill to the Senate with a vote of confidence.
The Senate will now send it, along with all of its legislation that both chambers in Albany approved during the session, to Hochul. In New York, the governor has line-item veto powers, but only against “items of appropriation of money.”
That means industry stakeholders will know Hochul’s sentiments on S 5935 within two weeks of her receiving the bill.
Could Hochul prevent S 5935 from becoming law?
Hochul can at least delay the enactment of S 5935. Hochul’s choices are to do nothing, sign the bill, or veto it entirely.
If Hochul takes no action, S 5935 becomes law 10 days (excluding Sundays) after her receipt of the bill. In that event, or her signing the bill, it would immediately become law, as immediacy is the effective date of the legislation.
If Hochul vetoes the bill, legislative leaders do have the authority to reconvene the Assembly and Senate to consider veto override motions. S 5935 cleared the Senate by a veto-proof majority, making an override theoretically plausible.
Another possibility in the event of a Hochul veto is the bill’s sponsor, Sen. Joe Addabbo, refiling similar legislation in the next session. In terms of New Yorkers’ access to social- and sweepstakes-based online casino-style games, though, the passage of S 5935 is somewhat of a moot point.
Sweepstakes casino operators already pulled out of New York
Many social and sweepstakes gaming sites stopped accepting contest entries from people in New York earlier this year, preceding enforcement action from New York Atty. Gen. Letitia James. The most significant immediate effects of S 5935’s potential enactment could be for companies servicing such websites.
S 5935 imposes fines for working with the operators of social casinos to provide elements of the business, like geolocation services and payment processing. In addition to fines, vendors would risk losing licenses to similarly provide services to licensed gambling enterprises in New York.
Vendors pulling out of relationships with sweepstakes casinos could affect the operation of those websites beyond New York. The addition of S 5935 to the New York Code could also inspire copycat legislation in more of the United States.
Could New York be the start of a bigger domino effect?
To date, Connecticut and Montana were antecedent to New York in installing similar legislation. New York’s far larger population makes it carry more weight in the gaming space, however.
Several other states, like Illinois, Louisiana, and Maryland, have debated bans on sweepstakes casinos in 2025. New York getting a bill of that nature across the finish line might lend more momentum to proponents.
For the moment, Hochul’s veto can still stymie that momentum. Even if that does occur, though, it might only prove to be a delay.
