New Jersey Enforces Ban on Sweepstakes Gaming Sites
New Jersey has officially implemented a ban on sweepstakes casino sites after Governor Phil Murphy signed bill A5447 into law on Friday. The bill had been awaiting Murphy’s approval after rapidly passing through the state Legislature on June 30.
Sweepstakes sites operate using both non-monetary “gold coins” and a secondary currency, “sweeps coins,” which can be exchanged for real cash prizes. Their recent growth has sparked significant debate among regulators and legislators.
Critics argue that this dual-currency model leverages existing sweepstakes laws as a loophole to provide real-money online gambling in areas where such activities remain illegal. Currently, real-money online gaming is authorized in seven states, while sweepstakes operations persist in a multitude of jurisdictions, frequently in a legal gray area.
Supporters contend that sweepstakes are commonplace contests run by various non-gaming companies, such as McDonald’s and Publishers Clearing House. They emphasize that players can participate without any purchase requirement and have the option to play for free.
The newly signed NJ sweepstakes bill consists of three key components:
- Prohibition of the “sweepstakes model of wagering”
- Introduction of new penalties for facilitating these games
- Authorization of enforcement capabilities for the state’s Division of Consumer Affairs and Division of Gaming Enforcement
Increasing Opposition to Sweepstakes Nationwide
New Jersey marks the sixth state to pass legislation concerning sweepstakes casino sites this year. Connecticut and Montana have also enacted similar laws, alongside Nevada, which granted broader enforcement against unlicensed operators without explicitly banning sweepstakes.
New York and Louisiana have also instituted bans this session, though New York Governor Kathy Hochul has yet to sign her state’s bill (S5935A). Meanwhile, Louisiana Governor Jeff Landry vetoed the ban, deeming it unnecessary for state oversight.
Both New York and Louisiana have issued cease-and-desist orders to several operators, including the Australian company Virtual Gaming Worlds (VGW). Louisiana’s Gaming Control Board issued 40 orders, while New York’s Attorney General Letitia James handled 26 orders. Following these directives, VGW ceased its sweepstakes offerings in several states, including New Jersey and New York.
“These actions convey a clear message,” stated LGCB Chair Christopher Hebert. “We will not tolerate illegal operators who jeopardize our citizens and threaten the fairness of our gaming industry.”
California, known for its extensive gray market for sweepstakes, is also contemplating a ban through AB-831. This bill is progressing through the state legislature with support from influential tribal casino interests.
Trade Groups Respond to New Jersey Legislation
The American Gaming Association, a vocal critic of sweepstakes sites, published a study on user perceptions of these platforms on July 31.
The study revealed that 59% of regular sweepstakes players consider it “definitely gambling,” while 31% believe it is “probably gambling.” The results were based on a survey of 750 players who participate at least monthly.
Conversely, two trade organizations representing sweepstakes operators are increasingly vocal. The Social Gaming Leadership Alliance (SGLA), which includes VGW, is led by former Congressman Jeff Duncan.
Duncan criticized the recent legislation, stating, “We urge Governor Murphy to veto A5447 and S4282 and engage in a genuine discussion about consumer protection and economic opportunity.” another group, the Social and Promotional Games Association, echoed similar sentiments, suggesting the bill misrepresents an entire industry and hampers innovation.
