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New York is now just a signature away from officially banning sweepstakes casinos after lawmakers passed two critical bills yesterday (June 30). Bill A5447, which prohibits the operation of sweepstakes casinos, cleared the Senate with a 34-5 vote following a strong 69-10 approval in the Assembly.
This legislation is now on Governor Murphy’s desk for his approval. If he signs it into law, New Jersey will join several states that have moved to ban sweepstakes casinos, a model that has come under increasing scrutiny from regulators and lawmakers nationwide. The bill specifically targets the “sweepstakes model of wagering,” where companies offer casino-like games tied to promotional entries or virtual currency purchases.
First-time violators of the proposed anti-sweeps law would face fines up to $100,000, while repeat offenders could be charged penalties as high as $250,000, among other things. New Jersey’s decision reflects a growing trend across the country, with similar bans advancing in states like Connecticut, Montana, Nevada, and New York
Louisiana was also a signature away from an official ban, but Governor Jeff Landry vetoed it at the dying minute, claiming that the state already has enough regulatory power in place.
Bill A5447 also aims to address other gambling issues by making it a crime to manipulate the outcomes of sporting events or wager with insider information. It also criminalizes using another person’s sportsbook account for betting and proxy betting, where a person risks property valued at $1,00 or more while agreeing to pay a percentage of the gambling proceeds to someone else.
SPGA Urges Gov. Murphy to Veto Bill
The Social and Promotional Games Association (SPGA), representing major operators in the sweepstakes sector, has strongly urged Governor Murphy to veto the recently passed bill aimed at banning the vertical.
The organization criticized the legislation as a hasty move that primarily serves to protect established casino interests rather than building a fair and innovative gaming environment.
In a public statement, the SPGA emphasized that the bill misrepresents a growing industry and could have wider implications beyond just sweepstakes, potentially impacting promotional platforms used by major companies like Marriott and Microsoft. They argued, “Assembly Bill 5447 seeks to outlaw promotional sweepstakes platforms that are already legal, do not require purchase to play, and are enjoyed responsibly by millions of adults across the country.”
The group expressed concern that this legislation represents a misguided effort to regulate through fear rather than evidence. “New Jersey has led the way in gaming regulation, not followed,” the SPGA noted in March, highlighting the need for a progressive approach rather than one that relies on outdated prohibitions.
Tax Hike Bill Also Approved
Alongside the ban on sweepstakes casinos, New Jersey legislators have also approved a significant tax hike on online gambling platforms. The newly passed bill sets the tax rate at 19.75% on gross gaming revenue (GGR) for online casinos, sports betting, and daily fantasy sports operators.
This marks an increase from the previous rates of 13% for sports betting, 15% for iGaming, and 10.5% for fantasy sports.
The measure gained approval in the Assembly with a vote of 45-33 and cleared the Senate with a 25-14 vote. Initially, Governor Phil Murphy proposed a higher tax rate of 25%, but after negotiations, lawmakers reached a compromise that resulted in the current rate. This adjustment was necessary to facilitate the bill’s passage as part of the broader state budget process.
Democratic Senator Paul Sarlo, who chairs the Senate’s Budget and Appropriations Committee, noted that they had to carefully reconsider some of the governor’s proposed revenue measures.
Like the sweepstakes ban, this tax hike is expected to receive Governor Murphy’s signature in the coming days, further reshaping the landscape of online gambling in New Jersey.\
Source: NEXT
