Governor faces decision on New York bill prohibiting online contest wins
Nothing's stopping New York from nailing the shutters on online sweepstakes casinos.
Following Attorney General Letitia James's aggressive move on the cease-and-desist orders sent to 26 sweepstakes operators earlier this month, lawmakers wasted no time in following suit. They swiftly pushed Senate Bill 5935 through the Assembly on June 17, and since the Senate already passed it on June 11, it's now sitting pretty on Governor Kathy Hochul's desk.
If Hochul inks it, the Empire State will join forces with states like Montana and Connecticut in putting an end to online sweepstakes casinos. The sweat-drenched operators of these game sites are hoping against hope that Hochul extends them a veto.
Meanwhile, the country-wide crackdown on online sweepstakes gambling is definitely gathering steam. Case in point: just yesterday, the Mississippi Gaming Commission jumped on board, announcing it had slapped cease-and-desist orders on several companies operating illegally within its borders.
SB5935: More Than Just a Ban
New York isn't pulling any punches with Senate Bill 5935. The bill intends to beef up the state's racing and wagering laws by outrightly prohibiting online sweepstakes games and blocking any ill-gotten gains from these sources.
The state's not playing games with enforcement either. The New York State Gaming Commission and Attorney General will be packing some serious muscle to give violators the financial beatdown they deserve.
Fines can range anywhere from $10,000 to $100,000 per offense, and offending companies might bid their other New York gaming licenses a tearful goodbye. individuals or firms who help these sites function by providing digital currency conversion options might even find themselves facing criminal charges.
The new bill's target isn't just the operators; it casts a wide net, snagging financial institutions, payment processors, content creators, platform hosts, and advertisers. In essence, the Empire State aims to demolish the entire network that allows these online games to operate and make a killing within its borders.
Why NY Just Says "No"?
New York's bottom line is that they view these sweepstakes sites as evil, underground operators. Supporters of the bill believe these platforms dodge all the usual consumer protection, gaming guidelines, and money laundering checks that regulated gambling operations adhere to. Since they don't pay taxes like legitimate casinos do, the state considers them a drain on the regulated gaming industry, which contributes hefty tax dollars and plays by strict rules.
Senator Joseph Addabbo (D-Queens), the sponsor of SB5935, stated:
"Online real money 'sweepstakes casinos' have recently become all the rage in New York. These products sidestep consumer protection, responsible gaming, and anti-money laundering regulations. These platforms are untaxed and unregulated. They present a serious threat to the state's legal, highly regulated, and economically important casinos."
The Social Gaming Leadership Alliance Slams the Bill
As expected, there's always someone ready to stand up and fight these biddings. The Social Gaming Leadership Alliance (SGLA) has been a consistent contender.
They're arguing that this new law could cut millions of Americans, including New Yorkers, off from the popular, no-cost online games they genuinely adore. Last month, Jeff Duncan, SGLA's executive director, said:
"By pushing through legislation that was drafted based on a fundamental misunderstanding of our industry and aggressively promoted by stakeholders with a competitive interest in shutting down these platforms, New York residents could lose access to popular, free-to-play online games enjoyed by millions. Of particular concern, the discretionary powers handed to the Gaming Commission under this bill could restrict the use of popular marketing tools, hurting businesses and the New York economy in ways lawmakers did not intend."
Sweepstakes casinos are not immune to the crackdown on online gambling in New York. The passing of Senate Bill 5935, if signed into law, will not only ban these games but also target financial institutions, payment processors, content creators, and advertisers associated with them.
In sports and gambling circles, the Empire State's stance against online sweepstakes casinos is akin to a firm goal against an opponent, with fines ranging from $10,000 to $100,000 per offense and potential revocation of gaming licenses for violators.
