New York is on the verge of banning online sweepstakes casinos after both chambers of the state legislature passed a bill targeting dual-currency gaming platforms. The legislation, Senate Bill S05935A, now awaits Governor Kathy Hochul’s signature to become law.
The measure prohibits the operation and promotion of sweepstakes-style games that mimic casino formats, including bingo and sports betting, and offer cash-out capabilities using virtual currency systems. The bill passed the Senate 57-2 and cleared the Assembly unanimously. If signed, it would place New York alongside Connecticut and Montana, which enacted similar bans earlier this year.
Scope of the New York Bill
Under S05935A, sweepstakes platforms using a dual-currency model—where virtual coins can be redeemed for cash or equivalents—will be barred from operating or advertising in the state. While sweepstakes offering non-cash prizes remain legal, the bill also extends its restrictions to include payment processors, suppliers, geolocation services, media affiliates, and certain investors involved in sweepstakes casinos.
Violators face fines starting at $10,000 and potential gaming license revocation. The New York State Gaming Commission, state police, and the Attorney General’s office will be empowered to enforce the ban through investigations and cease-and-desist orders. Revenue from penalties will go to the state’s Commercial Gaming Revenue Fund, which supports gambling addiction education and treatment.
Legal Pressure Mounts as Operators Exit
Earlier in the year, New York Attorney General Letitia James sent cease-and-desist letters to 26 online sweepstakes operators, including VGW’s Chumba Casino, LuckyLand, and Global Poker. All named entities complied, with VGW confirming its exit from the state in May.
“This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation,” said a spokesperson from the Social and Promotional Games Association, urging Governor Hochul to reject the measure. Critics, including the Social Gaming Leadership Alliance led by VGW, argue the legislation jeopardizes digital gaming innovation and investment.
States Align on Enforcement
Connecticut and Montana have already enacted comparable legislation. Connecticut’s Public Act 25-112, signed by Governor Ned Lamont, outlaws sweepstakes casinos not connected to legitimate sales and bans any prize redeemable for cash. Violators face Class A misdemeanor charges.
Montana passed Senate Bill 555 in May, outlawing dual-currency online sweepstakes and classifying violations as felonies punishable by up to 10 years in prison. The law becomes effective on October 1.
Meanwhile, enforcement in other states is intensifying. On the same day New York’s Assembly passed SB5935, Louisiana’s Gaming Control Board announced action against 40 sweepstakes and offshore operators. Mississippi also issued cease-and-desist orders to several platforms, including VGW’s Chumba Casino.
While New York prepares to finalize its legislation, the momentum to regulate or eliminate sweepstakes-style gaming is gaining traction nationwide. Some states, like Louisiana and Maryland, have opted for enforcement or have seen legislative efforts stall. Still, the national trend points toward a tougher stance on virtual sweepstakes that offer cash-equivalent rewards.
Source:
“Gov. Kathy Hochul’s signature is last step for New York sweeps ban”, sbcamericas.com, Jun 18, 2025
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