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New Jersey has officially joined the growing list of U.S. states taking action against sweepstakes casinos.
At the end of last week, Governor Phil Murphy signed Assembly Bill 5447 into law, closing a loophole that allowed two-currency platforms to operate while real-money online casinos remained tightly restricted. The law prohibits sweepstakes casinos outright, sets penalties for violations, and directs both the Division of Consumer Affairs and the Division of Gaming Enforcement to enforce the ban.
Wagering Ban and Enforcement
Under the new law, sweepstakes casinos that use a dual-currency system with free-play “Gold Coins” and redeemable “Sweeps Coins” are now considered illegal gambling operations in New Jersey. First-time violations can result in fines of up to $100,000, while repeat offenders face penalties of up to $250,000. Regulators also gain the power to seek injunctions and pursue unlicensed operators directly.
The measure had been awaiting Murphy’s signature since June 30, when it cleared the state Legislature. According to the governor’s office, the intent is to eliminate any ambiguity in state law and protect consumers from operators presenting themselves as legitimate alternatives to regulated online casinos.
No More Gray Area
While regulated real money online casinos are legal in only seven states, sweepstakes casinos have been available in dozens more. They operate under the principle of “no purchase necessary” that governs sweepstakes law, which allows players to participate without direct payment. Advocates often point to promotions such as McDonald’s Monopoly or Publishers Clearing House contests, which offer prizes with free play options.
Critics, however, argue that the dual-currency model in sweeps sites is essentially unlicensed gambling disguised as a sweepstakes. By banning the model outright, New Jersey has removed any room for interpretation.
A National Trend
New Jersey is the sixth state this year to act against sweepstakes casinos, following Connecticut, Montana, Nevada, New York, and Louisiana. Each state has taken a different path. In New York, a ban has passed the Legislature but still awaits the governor’s signature. In Louisiana, the governor vetoed a ban but regulators issued dozens of cease-and-desist orders. Nevada did not explicitly ban sweepstakes casinos but expanded enforcement powers against unlicensed operators.
The Garden State’s action adds momentum to a broader trend, with California also considering legislation to outlaw sweepstakes casinos.
Industry Pushback
The sweepstakes industry has resisted state-level crackdowns. Former Congressman Jeff Duncan, now head of the Social Gaming Leadership Alliance, criticized New Jersey’s legislation as “the wrong solution to a misunderstood issue.” The Social and Promotional Games Association also warned the bill would “ignore data, undermine innovation, and put New Jersey’s reputation as a forward-thinking leader in tech and entertainment at risk.”
Despite the pushback, some operators had already anticipated the change. In July, Australian-based Virtual Gaming Worlds, the company behind Chumba Casino and Luckyland, withdrew from New Jersey ahead of the ban.
Looking Ahead
With enforcement powers now clearly outlined, New Jersey regulators are expected to take swift action against any operators still offering sweepstakes-style gambling. The state’s decision reflects a broader reality across the U.S.: jurisdictions with regulated iGaming are increasingly unwilling to allow sweepstakes casinos to compete without oversight or tax contributions.
As California and other states consider similar steps, the debate over sweepstakes casinos shows no sign of slowing.
