A bill prohibiting New York sweeps casinos is up for consideration in the State Senate. With its introduction, Senator Joseph Addabbo has followed up on a promise to address the “sweepstakes gaming loophole” by introducing legislation to ban sweepstakes casinos in New York State.
On March 4, Addabbo introduced Senate Bill 5935, which prohibits online sweepstakes games and revenue from illegal markets. The Senate referred the bill, which also sets penalties and details enforcement provisions, to its Addabbo-chaired Racing, Gaming, and Wagering Standing Committee.
The move follows Sen. Addabbo’s latest effort to legalize New York online casinos through a bill introduced on Jan.21. On the same day, the champion of legal New York online casinos pledged to protect Empire State residents by tackling sweepstakes operations.
As chair of the gaming committee, Addabbo said in his statement that shielding New Yorkers from gambling-related harm is a top objective:
One of my primary objectives as Gaming chair is ensuring New Yorkers are protected from gambling operations that have the potential of becoming more problematic without proper legislative action, such as unregulated sweepstakes casino operators. 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. The use of money to play a game and win more money is simple gambling and should be safely regulated.
‘Popular’ sweeps casinos easily accessible to minors
In a March 5 interview, Sen. Addabbo told Bonus his sweeps bill would “certainly” pass his committee and proceed to the next stage. Further, given that March is Problem Gambling Awareness Month, he said the aim will be to pass it out of committee in the following weeks.
Simultaneously, Addabbo will work with his colleague, Assembly Member Carrie Woerner, to have the companion bill introduced in the assembly. Otherwise, he said his efforts will aim to educate his legislative colleagues on why passing the bill is essential.
Why should we support a bill like this? Well, because we have this very popular product that’s unregulated and very easy for minors to fall prey to problem gaming.
The senator had his committee director do some “research” on New York sweepstakes offerings as part of his efforts. Addabbo added that what he found was unsettling.
He found a site, and with a click of a button, he was 21 years old. They didn’t ask him for a picture of his ID. All he needed was an email and a click of a button. Are you 21? Yes.
Now, his infiltrator has played so well he’s earned enough ‘coins’ to withdraw his winnings as a cash-based gift card. “That’s gambling,” Addabbo said.
Why are we allowing the sweepstakes casinos into this market, into New York, unregulated?
Rather than wait on the sidelines, Addabbo said he opted to do something more.
We’ll work with the Gaming Commission. We’ll work with our Attorney General and the state. But I figured, let’s do something legislatively as well.
Sweeps bill takes hardline with offenders
Addabbo’s newest legislation defines sweepstakes as any game, contest, or promotion available online that simulates casino-style gaming and uses dual currency to award cash or prizes.
Games at issue include but are not limited to: slot machines, video poker, blackjack, roulette, craps, poker, lottery draw games, instant win games, keno, bingo, and sports wagering.
The bill explicitly leaves play money social casinos untouched, provided they don’t offer the potential to win cash:
A sweepstakes game shall not include a game which does not award cash prizes or cash equivalents.
Most notably, in addition to banning sweepstakes, SB 5935 prohibits applicants and licensed suppliers—including payment, geolocation, and affiliate providers—from supporting their operations.
Section 2.2 details the legal specifics under the heading of “Prohibition:”
(a) It shall be unlawful for any applicant, licensed entity, gaming employee, key employee, individual investor or investment firm, board member, or any other person or entity to operate, conduct, or promote sweepstakes games within the state of New York.
(b) It shall be unlawful for any applicant, licensed entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to support the operation, conduct, or promotion of sweepstakes games within the state of New York.
Anyone caught breaking the law would face fines of $10,000 to $100,000. The legislation would also strip offenders of existing gaming licenses and make them ineligible for future licensing.
Any applicant, licensed entity, gaming employee, key employee, individual investor or investment firm, board member, or any other person or entity found in violation of this section shall be subject to a fine of not less than ten thousand dollars and not more than one hundred thousand dollars for each violation and shall be subject to the loss of a gaming license and/or be ineligible for a gaming license.
Legislation’s ‘wide net’ shows ‘New York means business’
Addabbo told Bonus he “cast a wide net” for a reason and noted the resemblance to the language included in his recent online casino bill.
He admitted the tone “was kind of harsh” and said that, as far as he knows, no other state has used similar wording in its legislation.
Taking a strong position, he added, was the point.
We want to send a message—enough of this illegal gaming. It’s a multi-billion dollar growing market, and it has to stop. And it’s hard because technology will dictate that it’s very easy and accessible, but we have to start somewhere. So, I included a wide net for not just the providers but the operators and suppliers. And I want to say New York means business when it comes to addressing the illegalities of either sweeps or protecting minors.
Sweeps bill addresses legal online casinos void
First elected to the Senate in 2008, Addabbo has been a seemingly tireless advocate for legalized gambling in New York State.
As chair of the gaming committee, Addabbo and his staff work to improve the multi-billion dollar New York gambling industry. They aim to maximize the state’s revenue potential, increase educational funding and job creation, and address gambling addiction and harm.
Before the launch of New York’s online sports betting market in January 2022, Addabbo’s team worked for over two years on legalization efforts.
In contrast to sports betting’s success, Addabbo’s attempts to legalize online casino gaming have encountered several roadblocks.
With SB 5935, Addabbo has challenged sweepstakes operators over the void left by New York’s lack of legal online casino gaming.
Governor Kathy Hochul has said she won’t address online casinos until New York awards its downstate casino licenses. In light of that, Addabbo has attempted to speed up the process. However, so far, he’s had little success.
The senator also faces opposition from the casino workers union, which fears that online casinos cannibalizing retail casino revenues will risk good union jobs. His efforts to find a compromise to bring unions onside have fallen short, though he hasn’t given up on online casinos yet.
Legalization: not a question of ‘if’ but ‘when’
Addabbo told Bonus he’d love the opportunity to speak with the union. If they’d listen, he’d tell them New York could be the model state that gets it right. But that can only happen if they negotiate language to protect and grow brick-and-mortar while adding online casinos.
I want to regulate it for the safety of New Yorkers, but I want to be clear: my constituents work at Resorts. Why would I want to jeopardize the jobs of my constituents? I only want to grow brick-and-mortar casino jobs, and I do think igaming is a way of doing that.
If he can get the union on board, his next step is the governor.
Addabbo said New York faces a $3 billion deficit next year, which is projected to double to $6 billion the following year. He added that he believes online casinos could help offset the budgetary shortfall, and Hochul should open a dialogue with stakeholders to figure out how to make legalization a reality.
“It’s not a question of if it happens, it’s a question of when,” he added.
Every year that we don’t do it, we can’t help people with an addiction who are already doing it illegally or in another state. And we lose about a billion dollars, if not more, to other states and illegal activity.
He said that’s not only a missed opportunity for revenue, jobs, and brick-and-mortar protection but also to help people with problem gaming.
People are already doing it in New York. Let’s not be blind to that.
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