New York Attorney General Letitia James has issued cease-and-desist letters to 26 sweepstakes casino and sports betting operators, demanding they stop offering their services in the state. The move signals a major escalation in regulatory scrutiny over the legality of social casinos that use virtual currencies redeemable for cash.
The attorney general’s office, in coordination with the New York State Gaming Commission, identified platforms offering slots, table games, and sports betting to New York residents using sweepstakes-based models. These models typically involve the purchase of virtual currencies — often with bonus “Sweeps Coins” that can be used to win real-world prizes or cash.
New York law prohibits gambling platforms from offering games of chance involving anything of value, including redeemable virtual currency. According to the AG’s office, these sweepstakes casinos “operate without regulatory oversight,” putting consumers at risk.
Major Operators Affected
Among the 26 operators named were some of the most recognizable brands in the sweepstakes space, including:
All of the named platforms are now expected to end the sale of sweepstakes coins to New York users. Some, including those operated by VGW (Chumba, Global Poker, LuckyLand), have already begun to phase out their New York services, with plans to end sweepstakes play entirely by Aug. 1.
Legal and Legislative Context
This enforcement action comes amid growing legislative interest in sweepstakes gambling. Bills aimed at banning sweepstakes casino models have already passed in Connecticut, Louisiana, Montana, and Nevada. In New York, similar bills are active in both legislative chambers.
State Sen. Joseph Addabbo, a longtime advocate for a regulated online gambling framework, praised the attorney general’s move, stating the platforms pose a risk of fraud, addiction, and unregulated access for minors. The AG’s office echoed these concerns, warning consumers about the lack of safeguards such as auditing, payout protections, and age verification.
Industry Pushback
The sweepstakes gaming industry has responded swiftly. The Social and Promotional Games Association (SPGA) issued a statement criticizing the AG’s characterization of the platforms as “illegal” and “dangerous.” According to the SPGA, sweepstakes promotions remain legal under federal law and are allowed in most U.S. states, including New York. The group also noted its members follow responsible gaming practices and consumer protection standards.
Separately, VGW — operator of three of the affected platforms — recently launched the Social Gaming Leadership Alliance, aimed at advocating for the industry and establishing voluntary best practices.
What New York Players Should Know
If you are a New York resident who uses any of the affected sweepstakes platforms, here’s what to expect:
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Purchases of Sweeps Coins are ending on all 26 named sites.
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You may still be able to access your account or use remaining Sweeps Coins until a future cutoff date, such as Aug. 1 in the case of VGW brands.
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Future access to sweepstakes features and prize redemptions may be restricted or discontinued entirely.
For players in other states, this could be a signal of future enforcement. Regulatory scrutiny around sweepstakes-based gaming models is increasing, and the legal status of such platforms could evolve rapidly in the months ahead.
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