New York’s decision to outlaw sweepstakes casinos has become a focal point in a broader national effort to restrict dual-currency gaming. With Governor Kathy Hochul’s signature putting immediate enforcement into place, the state shifted from months of quiet anticipation to one of the most consequential actions of the year for this segment of the online gaming market.
New York Moves From Warnings to Full Enforcement
Senate Bill 5935, delivered to the governor at the start of December, took effect the moment it was signed. The measure targets platforms that allow players to convert virtual currencies into redeemable rewards while offering casino-style, sports-style, lottery-like or bingo-like gameplay. Its reach extends beyond the operators themselves to partner companies that handle technology, payment services, media promotion, geolocation tools or financial processing.
Those found in violation face fines starting at $10,000 and rising to $100,000 for each offense, with additional consequences appearing in licensing eligibility.
Regulatory pressure in New York had been building long before the bill reached the governor’s desk. Earlier in the year, the attorney general issued 26 cease-and-desist notices, prompting multiple companies—including prominent sweepstakes casino operators—to withdraw voluntarily. The departures occurred despite the sector generating an estimated $762 million in sales and over $250 million in net revenue in 2024.
New Bills Signal Another Active Year Ahead
While New York finalized its prohibition, three states prepared separate proposals that would further tighten the environment for sweepstakes platforms in 2026. In Florida, House Bill 591 aims to impose criminal penalties for “operating, conducting or promoting” internet gambling and reinforces the state’s existing gambling framework linked to the Seminole Tribe.
Florida represents more than $1 billion in operator revenue, making the new bill particularly significant. The Social Gaming Leadership Alliance opposed the proposal, with Jeff Duncan arguing, “We strongly disagree with the categorisation that Social Plus games that utilise sweepstakes promotions have anything in common with illegal offshore gambling operations,” and adding, “HB 591 laudably seeks to stop illegal gambling… but fails to account for how lawful promotional sweepstakes operate in Florida.”
In Maine, Senator Craig Hickman introduced LD 2007, including fines of up to $100,000. State regulators had already cautioned residents that sweepstakes casinos functioned outside the state’s regulated gambling structure. Indiana’s House Bill 1052, filed by Representative Ethan Manning, defines sweepstakes gaming under state law while introducing civil and criminal penalties and provisions relating to tobacco and e-cigarette distribution.
Regulatory Actions Continue Across the Country
Legislative bans adopted this year in California, Connecticut, Montana, Nevada and New Jersey have already reduced the number of states where the sweepstakes model can operate freely. Other states relied on enforcement rather than legislation. Louisiana’s governor declined to sign a ban, but regulators issued 40 cease-and-desist letters under existing authority. Agencies in Arizona, Delaware, Michigan, Minnesota, Pennsylvania, Tennessee and West Virginia also issued orders, with West Virginia’s attorney general sending subpoenas.
Meanwhile, one of the largest sweepstakes operators adjusted its strategy. VGW exited Canada and explained, “Our Canadian business is relatively small, as the vast majority of our players reside in the larger US market, where we will concentrate our management focus, resources and investment going forward.”
Source:
“NY governor signs sweepstakes casinos ban, three states introduce similar bills”, igamingbusiness.com. December 8, 2025
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