Another major name in the sweepstakes gaming industry has pulled out of New York.
Funzpoints, owned by Canada-based Woopla Inc., has added New York to its list of excluded states, per its latest terms and conditions released over the weekend. New York joins Nevada, Idaho, Louisiana, Michigan, and Montana as territories where “purchases, use of the games and participation in the Sweepstakes Promotions” are not permitted at Funzpoints.
Launched in 2018, Funzpoints is one of the more established sweepstakes casino brands, alongside the likes of Chumba Casino, Pulsz, etc.
We don’t get state-by-state revenue numbers for sweeps operators because their industry isn’t regulated. But it’s safe to assume New York, alongside California and Texas, is one of the most lucrative markets.
So Funzpoints shutting down in New York (even though there have been no cease-and-desist letters or bills passed) points to how far sweeps operators are willing to go to preserve a long-term future in the state.
Funzpoints is biggest departure since early exodus
Sweeps sites have been leaving New York since March, after Sen. Joseph Addabbo introduced a bill that would ban sweeps gaming in the state.
Notable names to close up shop in the Big Apple include High 5 Casino, Stake.us, McLuck, Hello Millions, Pulsz, Chanced, Fortune Coins, and Real Prize. That all happened in March, the same month Addabbo introduced his bill and it quickly passed through committee.
The Social and Promotional Games Association released a lengthy statement that month, detailing how their member operators were “adjusting their approach” in New York given “ongoing constructive conversations with state officials.”
“Each SPGA member will determine the most appropriate path forward based on individual legal guidance and strategic priorities,” the statement read. “This reflects a broader industry commitment to collaboration and regulatory clarity around sweepstakes-based promotional games.”
The exodus list didn’t contain, however, some of the biggest names in sweeps.
VGW, for instance, the Australian sweeps behemoth that owns Chumba Casino, LuckyLand Slots, and Global Poker, is still operating in New York. WOW Vegas hasn’t pulled out. Same with Crown Coins Casino.
And neither had Funzpoints. Until now.
What’s the latest in New York? And what are sweeps operators doing there?
Addabbo’s bill, SB 5935, was sent to the Senate floor on March 20 following a stamp of approval from the Senate Racing, Gaming, and Wagering Committee. However, it hasn’t had any action since.
Meanwhile, in the Assembly, a bipartisan bill with 16 sponsors that also bans sweepstakes gaming sites in New York, AB 6745, will get its first hearing with the Assembly Racing and Wagering Committee on Wednesday.
In New York, sweeps operators — now including Funzpoints — are likely doing one of two things.
One, they’re sensing the writing on the wall and leaving New York before getting kicked out.
Or two, even if neither bill passes, they’re conveying to lawmakers they will leave for now and only rejoin the state once they’re accepted, once they’re part of a regulated framework. It’s worth it for the potential long-term financial gain. It may feel like momentum is against sweeps right now, but that may not always be the case. (Just look at how quickly the industry moved on from skewering prop-style DFS pick ’em games.)
Sweeps regulation may still be in the future, and operators want to be in the good graces of whoever is making licensing decisions in New York when that day comes. And the sooner operators leave, the better, because any bill establishing sweeps regulation in the future may contain language similar to SB 2614, Addabbo’s bill that would legalize iGaming.
SB 2614, which likely won’t pass, says “an unlicensed entity offering games … within the previous three years of the effective date of this article shall be ineligible to receive an interactive gaming license.”
Translation: Hey sweeps operators, if you were live in New York within three years of this bill going into law, you won’t be eligible for a license.
Again, theoretically, similar language would be put in a sweeps regulation bill. (Or, shoot, if any sweeps operators out there want to crack the New York real-money market one day, then they definitely want to hightail it out of the state right now.)
SPGA echoed its Louisiana approach in New York
Another state with some current activity on the legislative sweeps front is Louisiana.
There, members of the Senate Judiciary B Committee recently heard testimony on SB 181, which would outlaw sweepstakes gaming in Louisiana (another state on Funzpoints’ list of excluded U.S. territories).
Part of testimony from the bill’s sponsor, Sen. Adam Bass, focused on comments from the SPGA that SB 181 would have unintended negative consequences for other sweepstakes promotions in other regulated industries, like hotel and travel rewards programs.
“I want to say, regardless of what you’ve heard, this bill does not affect legitimate promotions, such as McDonald’s Monopoly, Starbucks or Marriott rewards,” Bass said. “This bill narrowly defines sweepstakes casinos.”
In its statement about adjusting New York policies moving forward, the SPGA relayed a similar sentiment to the one Bass rejected in Louisiana.
“We know New York officials recognize the need to get this right,” an SPGA spokesperson said in the statement, “because any decisions about social sweepstakes could have broader implications — not only for promotions by companies like Starbucks and Marriott, but also for any mobile game where consumers spend money, from Candy Crush and Coin Master to Clash of Clans and Monopoly Go.”
We’ll see if this topic gets discussed in AB 6745’s hearing Wednesday.
