
New York’s chief proponent of online casino legalization, Sen. Joseph Addabbo, is also looking to tackle the controversial topic of sweepstakes casinos this year.
Sen. Addabbo recently reintroduced the same online casino legalization bill he championed unsuccessfully in 2024. There’s nothing new in this year’s version of the bill, but the Senator simultaneously issued a press release saying he will “push to address the sweepstakes gaming loophole.”
New York launched legal online sports betting in January 2022. Ever since, Addabbo and his ally in the Assembly, Gary Pretlow, have been attempting to add real-money online casino games to the mix. However, they’ve encountered resistance from retail casino workers’ unions and a Governor who wants nothing to do with the issue until the ongoing licensing process for new downstate retail casinos is out of the way.
In the meantime, sweeps casinos like Chumba Casino and WOW Vegas have filled the void, offering New Yorkers a legal way to play casino games online with the chance to win cash prizes.
Sen. Addabbo’s concerns are centered on the fact that the sweeps casinos, while legal, aren’t licensed by an in-state regulatory body. He also appears to take issue with the fact that, because they don’t qualify as real-money casino gambling, many of these sites accept users 18 and up. Commercial gambling operations in New York have a minimum age of 21, though the state lottery and upstate tribal casinos are accessible to anyone 18 and up.
Legal but unregulated
Demand for online casino products is high across the US, but the real-money versions are still only legal in seven states. Following the repeal of the federal prohibition on sports betting in 2018, a wave of online gambling expansion efforts swept the country. Yet, although over half of states (31, to be precise) have opted for legal mobile wagering, most online casino efforts have encountered roadblocks similar to those New York has been experiencing.
Before legal sports betting was a possibility, daily fantasy sports (DFS) sites had their heyday as the next best thing. These used the federal carveout for fantasy sports contests to offer something that felt a bit like sports betting, but didn’t require state regulation. Eventually, many states decided to address the DFS issue one way or another. Some banned the sites, others established rules and imposed taxes on them. Others, to this day, have opted to maintain the status quo, treating them as legal but unregulated.
Sweepstakes casinos have emerged as the online casino vertical’s counterpart to DFS. They are, effectively, play money social casinos with an attached sweepstakes promotion that allows them to award cash prizes. Like fantasy sports contests, sweepstakes are a matter of federal law, so it’s a business model that’s legal in any state that hasn’t passed laws to the contrary.
Even Sen. Addabbo, though opposed to their unregulated status, acknowledges that sweeps casinos are currently permitted under New York law. However, he describes their use of federal sweepstakes law as a “loophole” that he’d like to close, either banning them or, perhaps, regulating them the way some states have regulated DFS.
Could New York and New Jersey regulate sweeps casinos?
In his press release, Sen. Addabbo says:
To close this loophole, I will work to ban or incorporate Sweepstakes Casinos in the state, akin to current laws in Michigan, Idaho, and Washington, and I will push for iGaming as a safe, effective alternative for online casino enthusiasts.
The phrase “ban or incorporate” is an interesting one. Although Michigan, Idaho, and Washington have all pushed out the sweepstakes casinos, that phrasing may suggest that another option is possible.
Neighboring New Jersey is currently considering a bill that would regulate sweepstakes casinos within the same framework as real money operators. Although it would mean paying privilege taxes and working with retail casino partners, the sweeps industry has embraced the suggestion. Its trade organization, the Social and Promotional Games Association, stated:
The SPGA welcomes Assemblyman Calabrese’s bill. The SPGA and its members are advocates for clear regulations that enable transparent, innovative, and responsible social and promotional gaming experiences.
One way or another, the topic of sweeps casinos is likely to come up in most iGaming legislation efforts this year. The National Council of Legislators from Gaming States has included a ban on sweeps in its Model Internet Gaming Act, which is meant to serve as a template for states considering legalizing the real-money option. However, New Jersey’s approach could also gain traction if enlisting support from sweeps operators proves to be helpful in getting gaming expansion bills across the finish line.