New York is poised to take a significant step in regulating online gaming, as Senate Bill 5935, which seeks to ban online sweepstakes casinos, has reached the desk of Governor Kathy Hochul. The bill, which passed both the Senate and Assembly earlier this year, is now in a 30-day window in which Hochul must decide whether to sign it into law or veto it. If she takes no action, the bill will automatically become law.
The Scope of Senate Bill 5935
Senate Bill 5935 directly targets the dual-currency model commonly used by sweepstakes casinos, where players purchase virtual currency and are given promotional currency that can be exchanged for cash prizes or similar rewards. This model, which simulates casino-style gaming, has been at the heart of many sweepstakes casinos operating in New York.
The bill not only prohibits these operators but also makes it illegal for various entities involved in supporting such platforms. This includes payment processors, content suppliers, affiliates, and geolocation providers. As written, SB 5935 would give the New York State Gaming Commission (NYSGC) the authority to interpret and enforce the law, closing the door on platforms attempting to circumvent the rules by rebranding or modifying their business models.
Industry Reaction and Economic Impact
The bill’s introduction has stirred considerable debate. While some lawmakers see it as a necessary step in regulating the online gambling market, advocacy groups such as the Social Gaming Leadership Alliance (SGLA) have strongly opposed it. The SGLA, citing a study by Eilers & Krejcik, warned that banning sweepstakes casinos could harm the New York economy. The study found that in 2024, New York’s online sweepstakes market generated $762 million in sales, with a net revenue of $251.7 million and a broader economic impact of $230 million.
The SGLA argued that regulating online sweepstakes could bring in approximately $100 million in tax revenue annually, echoing similar calls from California. However, the bill has managed to secure the backing of the state’s legislature, leaving little room for compromise at this late stage.
The Fate of Sweepstakes Casinos in New York
If Governor Hochul signs SB 5935 into law, sweepstakes casinos would be forced to exit the New York market. These platforms, which depend on the dual-currency system, would no longer be able to operate under the new rules. While some operators may attempt to pivot to entertainment-only models using non-redeemable tokens, this would likely reduce their profitability and engagement, making such a shift unsustainable for many platforms.
The bill’s reach also extends to the broader ecosystem that supports sweepstakes casinos, including affiliates, payment processors, and content suppliers. These businesses would face legal consequences if they continue to support or promote sweepstakes gambling in the state. As a result, even platforms that try to adapt would struggle to find the necessary infrastructure to remain operational.
Wider Implications for the Sweepstakes Casino Model
This bill is part of a growing trend of states banning sweepstakes casinos. California already enacted similar legislation earlier in 2025, and with New York potentially following suit, two of the largest U.S. markets could be closed to the sweepstakes casino model. This threatens the long-term viability of this type of online gaming in the country. If other states adopt similar measures, the future of sweepstakes casinos could be severely limited, forcing operators to either find new models or cease operations altogether.
The final decision now rests with Governor Hochul, who has until December 31, 2025, to sign the bill into law. If enacted, SB 5935 would represent a significant shift in the regulation of online gaming in New York, closing the door on a popular, yet controversial, form of digital gambling.
Source:
WALLACHLEGAL, x.com, December 3, 2025
The post New York Bill to Ban Online Sweepstakes Casinos Reaches Governor’s Desk first appeared on RealMoneyAction.com.