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Newly-filed legislation to address sweepstakes casinos suggests state lawmakers are uncertain about whether to regulate or prohibit sweepstakes platforms, or merely subject them to further study.
Amid nascent legislative efforts in Mississippi and New York to impose statutory prohibitions on online sweepstakes-based casinos, a bill in the New Jersey Assembly seeks to bring sweepstakes casinos under the state’s existing internet gaming regulations.
Initial consideration of bill A.5196, introduced by Democratic Assemblyman Clinton Calabrese, was delayed Thursday (January 23), as the measure was removed without comment from the scheduled agenda of the Assembly Tourism, Gaming and the Arts Committee.
The bill remains in committee and may be considered at a future meeting. Calabrese, vice chair of the committee, was unavailable for comment Wednesday on why discussion on his bill was postponed.
Under the bill, operators of online sweepstakes platforms would be required to obtain the same supplier licenses as New Jersey online casinos and partner with an Atlantic City casino to operate in the state. The current tax rates of 13 percent on online sports betting and 15 percent on online casinos would also be applied to sweepstakes companies.
The bill would also allow the New Jersey Division of Gaming Enforcement to work with law enforcement agencies to crack down on unauthorized sweepstakes casinos.
Calabrese’s proposal follows mounting interest among state policymakers on the popular sites offering casino-style games and betting on sports, ostensibly as a form of sweepstakes contest that does not require real money to be wagered to win cash prizes.
Model legislation for internet gaming proposed by the National Council of Legislators from Gaming States (NCLGS) in November included a proposed ban on sweepstakes casinos.
The NCLGS proposal calls for the prohibition of sweepstakes sites, with penalties for violations ranging from fines of $10,000 to $100,000 per offence and the potential loss of a gaming license. Repeat offenders would be subject to increased fines and potential imprisonment of up to two years.
“I think it is something that needed to be done,” Shawn Fluharty, a Democratic state representative from West Virginia and president of the NCLGS, told Vixio GamblingCompliance about adding the prohibition of sweepstakes to the draft legislation.
Sweepstakes platforms are known to have been subject to enforcement actions by gaming commissions in Michigan, Connecticut and Maryland, although the chief gaming regulator of the latter state recently testified to Maryland lawmakers that cease-and-desist letters sent to six sweepstakes platforms had yet to prompt any of them to exit the state.
Two bills, Senate Bill 340 and House Bill 17, reintroduced earlier this month proposing to legalize and regulate online casinos in Maryland both include language requiring regulators to study the impact of online sweepstakes sites and other forms of unauthorized gaming.
Mississippi, New York Senators Seek Sweepstakes Prohibition
In Mississippi, Republican Senator Joey Fillingane earlier this week introduced what appears to be the first bill filed at the state level to expressly prohibit sweepstakes platforms offering casino games.
Senate Bill 2510 specifically would extend the state’s statutory prohibition on electronic sweepstakes devices to include online sweepstakes casinos. Each violation would be deemed a felony, with each conviction subject to a $100,000 fine and ten years in prison.
The bill has been referred to the Mississippi Senate Judiciary, Division B Committee for consideration.
Fillingane did not immediately respond to a request for comment on his bill.
Meanwhile, New York Senator Joseph Addabbo Jr., a Democrat and chair of the Senate Committee on Racing, Gaming and Wagering, this week stated that he plans to lobby lawmakers and the state's governor to support a ban on sweepstakes casinos.
“One of my primary objectives as gaming [committee] 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,” Addabbo’s said on a podcast series on gaming with the news organization City and State.
Addabbo’s said he was seeking to align New York with states such as Michigan, Idaho and Washington, which have already implemented stricter regulations on sweepstakes and are generally not serviced by leading sites.
While he works on sweepstakes, the veteran lawmaker has introduced Senate Bill 2614 that would legalize iGaming in New York. The bill has been referred to the Senate Committee on Racing, Gaming and Wagering.
Addabbo said he believes iGaming is “a safe, effective alternative for online casino enthusiasts”.
Additional reporting by James Kilsby.
