Just over a month after introducing a bill to legalize online casinos in New York while cracking down on online sweepstakes casinos, Sen. Joseph Addabbo Jr. has introduced another gaming-related bill that specifically goes after sweeps operators.
As written, S5935 would prohibit “operating, conducting, or promoting certain online sweepstakes games or supporting the operation, conduct, or promotion of such games.”
In addition, the bill prohibits the support of such games by financial institutions, payment processors, geolocation providers, media affiliates and gaming content suppliers.
Addabbo: Sweeps casinos ‘present unfair competition’
In his justification for S5935, Addabbo recognized that online sweepstakes casinos have become widely available in New York courtesy of the Internet and mobile devices. What’s more, he emphasized, these games have become readily available to minors.
“These products evade consumer protection, responsible gaming, and anti-money laundering requirements to which gambling in New York is otherwise subject,” the bill reads.
“These products and operations are untaxed and unregulated. They present unfair competition to the state’s legal, highly regulated and economically important casinos.”
Addabbo defined online sweepstakes games as any contest simulating a casino-style game available online “that utilizes a dual-currency system of payment” that allows players to exchange any currency for any prize, award, cash or cash equivalents.” Casino-style games include draw and instant-win games, keno, bingo and sports wagering, according to the proposal.
Compared with other states looking to crack down on sweepstakes gaming, New York boasts arguably the most dialed-in definition on the industry.
The bill, if passed, would establish “a powerful deterrent” to illegal online gaming operators from opening up shop in the Empire State.
Violators would face fines up to $100K
In addition to specifying the legality of online sweepstakes casinos in New York, the bill also creates penalties for operating or facilitating unregulated online gaming.
Anyone found in violation of this bill, if passed, will become subject to hefty fines, ranging from $10,000 to $100,000 for each violation.
Addabbo’s bill, introduced on March 4, will first go under review in his own committee: the Senate Racing, Gaming and Wagering Committee.
SPGA calls ‘deeply flawed’ proposal ‘a colossal waste’ of resources
The Social and Promotional Games Association (SPGA) released a statement after the bill emerged, noting that it “unconditionally opposes” the proposal.
“We appreciate New York lawmakers’ formal recognition that social sweepstakes are a legal form of entertainment – you don’t need to outlaw something if it is already illegal.”
But, the group added, “that’s where our appreciation ends.” The SPGA said that New York lawmakers “have no business dictating to New Yorkers” what games they are allowed to play on their mobile devices. “This deeply flawed legislation is an affront to personal freedoms, an insult to New York voters, and a colossal waste of government resources,” the SPGA said.
As written, according to the group, the bill would criminalize promotional sweepstakes that small businesses use in the Empire State, risking millions in revenue for those businesses as well as thousands of jobs. The same would go for larger companies, the SPGA said, specifically highlighting the promotion offered by Marriott that gave away packages for Taylor Swift’s Eras Tour.
“The correct approach to support innovation, consumer choice, and the economy of New York,” the SPGA said, “is sensible regulation and taxation of social sweepstakes games that millions of adults enjoy responsibly and safely.”
By working with sweepstakes operators, the group concluded, New York legislators can develop “a more sensible, balanced approach that protects the rights of consumers and not the special interests of a small handful of corporate interests.”
Addabbo follows up on initial approach to sweeps casinos
This latest proposal comes just over a month after Addabbo introduced legislation to legalize iGaming in New York, around the same time that the New York State Gaming Commission expressed “serious concern” regarding sweepstakes casino gaming.
One provision within that proposal notes that any unlicensed entity offering gaming that otherwise requires a state gaming license within three years of the bill’s effective date would essentially be banned from New York. Certainly, that clause refers to online sweepstakes operators.
Speaking on a podcast shortly after, Addabbo made it clear that he wanted to protect New Yorkers from gambling operations “that have the potential of becoming more problematic without proper legislative action, such as unregulated sweepstakes casino operators.”
Addabbo continued: “Many sweepstakes operators are located offshore, making enforcement limited or impossible, and our most vulnerable populations, youth and elderly, are most often targeted, which is why I want to act to address this existing loophole.”
That loophole refers to the dual-currency system found at sweeps casinos, which offer Gold Coins and Sweeps Coins, the latter of which can be redeemed for real money.