New Jersey Becomes the Fourth State To Ban Sweepstakes This Year

Governor Phil Murphy brought the matter of dual currency sweepstakes casinos in the Garden State to a dramatic close this week, as he signed Assembly Bill 5447. This bill passed out of the legislature in late June but has languished on the governor’s desk throughout the late summer.

Legislators had specifically targeted the dual currency typically used by sweeps casinos that allow players to use sweeps coins as a stand-in for real money wagering.

Though they also included language prohibiting anything that mimics sports betting or casino-style games, it is likely that social casinos, which do not employ the dual currency system, will remain legal.

There is also a carve-out for retail sweeps games, such as the McDonald’s Monopoly game, which will allow consumers to earn sweepstakes entries for the purchase of “food, nonalcoholic beverages, and other trinkets or mementos.”

The penalties can be quite steep, starting at $100,000 and going to $250,000 on subsequent offenses. New Jersey is the fourth state to actually criminalize sweeps casinos, following Connecticut, Nevada, and Montana.

New York is moving closer to an outright sweeps ban, with Senator Joe Addabbo’s bill passing the legislature but also apparently lost in a mountain of paperwork on Governor Hochul’s desk with no word on when or if she might sign it.

In Louisiana, a similar situation saw Governor Landry veto his legislature’s anti-casino sweeps bill, stating that they were already illegal under Louisiana law and asking the attorney general to step up ongoing enforcement action. 

Mississippi and Maryland both came close to passing legislation as well this year, and Ohio had robust discussions on the matter as well. Other than New York, California is now the most closely watched state still to act this year. 

Much like the just-signed New Jersey bill, California AB 831 targets dual currency models and casino-like games, though the fines are a bit less jaw-dropping. It’s currently held up in the California Appropriations Committee, whereas in many states, any legislation that would cost the state money to implement must first be voted out. 

This first test of the legislation will need to happen before the August 29th deadline for bills to be cleared out of the committee, and is likely to happen several days ahead of that.

The New Jersey law takes effect immediately, but many sweepstakes operators like VGW, Stake, and High Five had already begun closing operations months back.

New Jersey has a robust online and land-based gaming ecosystem that produced about $6.3 billion in revenue last year, with about $2.4 billion of that coming from regulated and taxed online casinos.

These operators would have had every reason to lobby heavily against any competitors that weren’t required to go through the rigorous licensing procedure or pay their fair share of gaming taxes, which would have given New Jersey about $570 million reasons to ensure a level playing field for everyone in the online casino space.