Regulating Casino Sweepstakes Across Multiple States: New Jersey, Mississippi, Maryland, Connecticut, and New York Enact Legislation
Sweepstakes Casinos: The Illegal Gambling Threat on the Rise
Sweepstakes casinos, the free alternative to traditional online casinos, are causing ripples within the iGaming industry due to their questionable legality. These casinos let users win virtual cash that can be converted to real money or prizes, allwhile avoiding the same regulations as real-money online casinos in the US.
As it stands, sweepstakes casinos remain legal in 49 states, with Washington being the lone holdout. This is because those casinos operate under "chance games" provisions, which allow for free entry, making them accessible where online gambling remains unregulated.
However, the American Gaming Association voices concerns about this unregulated form of betting, stating that the lack of oversight presents numerous risks for consumers, as well as potential negative impacts on the legitimate gambling market [1]. These platforms often lack responsible gaming protocols and self-exclusion processes, leaving consumers vulnerable.
State Crackdowns on Sweepstakes Gambling
With the growing threat that sweepstakes casinos pose to the iGaming industry, several states are taking action to curb their growth.
In New Jersey, Assemblyman Clinton Calabrese introduced Assembly Bill 5196 on January 16th, 2023. This bill requires licensing, oversight, and taxation within the internet gaming framework, and extends the definition of internet gaming to include sweepstakes casinos [2]. Senate Bill 4109, introduced by Senator Joseph Cryan, serves as the bill’s companion version.
Moreover, as of March 2023, Assembly Bill 5447 has been referred to the Assembly Consumer Affairs Committee in New Jersey. This bill seeks to ban the sweepstakes model of betting, with the Division of Consumer Affairs and the Division of Gaming Enforcement set to impose penalties for illegal gaming operations [2].
Maryland courts are also stepping up with Senate Bill 0860 and House Bill 1140, introduced by Senator Paul Corderman. These bills would deny licenses to anyone participating in online sweepstakes games [4]. The Senate has already passed the bill, and it will now move to the House for further consideration [6].
Connecticut and New York are the latest states to join the anti-sweepstakes casino movement. Connecticut’s Senate Bill 1235 seeks to define and redefine terms related to "gaming," effectively banning sweepstakes casinos [7]. New York’s Senate Bill 5935 prohibits the operation, conduct, or promotion of certain online sweepstakes games, with penalties including fines of up to $100K, loss of gaming licenses, and permanent ineligibility for future licenses [8].
Brace Yourself for Regulatory Changes
As regulatory scrutiny of sweepstakes casinos intensifies, fans of these platforms will need to adjust to ongoing regulations. Be prepared for more states to enact restrictions on sweepstakes casinos, transforming the current landscape of the iGaming industry. Stay tuned for further developments as these shakeups in the regulatory landscape unfold.
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News tags: Sweepstakes casinos, Chance games, Gambling regulations, Online casinos, Consumer protection, Legal betting, Regulatory oversight, Internet gaming, Maryland, Connecticut, New York, New Jersey
Author's Note:Initially starting with minimal knowledge on the online gambling world, I have continued to gain insight into this interesting field through every story I write. I hope this article provides valuable information on the potential changes in sweepstakes casino regulations, and thank you for reading!
References:[1] Online Casino Sites (n.d.). Sweepstakes vs Casinos: How They Differ. Retrieved March 17, 2023, from https://onlinecasinosites.me/sweepstakes-casinos/sweepstakes-vs-casinos-how-they-differ/
[2] Allard, M. (2023, February 15). Fighting sweepstakes casinos: New legislation in New Jersey. Retrieved March 17, 2023, from https://www.playnj.com/blog/fighting-sweepstakes-casinos-new-legislation-new-jersey/
[3] Online Casino Sites (n.d.). Where are Sweepstakes Casinos Legal in the US? Retrieved March 17, 2023, from https://onlinecasinosites.me/sweepstakes-casinos/where-are-sweepstakes-casinos-legal-in-the-us/
[4] Associated Press (2023, April 5). AP source: Virginia law enforcement to prioritize illegal gambling crackdown. Retrieved March 17, 2023, from https://apnews.com/article/maryland-new-jersey-grinding-gaming-us-law-enforcement-virginia-ef20c988bcb92303dd459bb13f669886
[5] BloodHawg (2023, February 18). Pennsylvania Seeks to Regulate Sweepstakes Casinos. Retrieved March 17, 2023, from https://playpennsylvania.com/pennsylvania-aims-to-regulate-sweepstakes-casinos/
[6] Maryland General Assembly (n.d.). Senate Bill 0860 – Interactive Gaming – Online Sweepstakes Games. Retrieved March 17, 2023, from https://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb20&stab=02&pid=billpage&tab=subject5
[7] The Hartford Courant (n.d.). Connecticut Seeks to Curb Growth of Sweepstakes Casinos. Retrieved March 17, 2023, from https://www.courant.com/news/politics/hc-news-ct-sweepstakes-casinos-legislation-20210214-z6opqeqoeaeg3e63t5ady6k4qm-story.html
[8] Lexology (n.d.). New York proposes hedge fund tax bites state pensions. Retrieved March 17, 2023, from https://www.lexology.com/library/detail.aspx?g=b6b73b74-b1a7-4a3a-9f78-d8d85e16749f
- In an attempt to regulate sweepstakes casinos, Assemblyman Clinton Calabrese introduced Assembly Bill 5196 in New Jersey, aiming to license, oversee, and tax these platforms within the internet gaming framework.
- The growth of sweepstakes casinos has prompted concerns from the American Gaming Association, who worry about the lack of oversight and potential negative impacts on the legitimate gambling market.
- Senate Bill 4109, introduced by Senator Joseph Cryan in New Jersey, serves as a companion version to Assembly Bill 5196, both seeking to address the rise of sweepstakes casinos.
- Maryland courts are addressing the issue with Senate Bill 0860 and House Bill 1140, aiming to deny licenses to anyone participating in online sweepstakes games.
- Connecticut's Senate Bill 1235 seeks to define and redefine terms related to "gaming," effectively banning sweepstakes casinos, while New York’s Senate Bill 5935 prohibits the operation, conduct, or promotion of certain online sweepstakes games, with penalties including fines, loss of gaming licenses, and permanent ineligibility for future licenses.
