New Jersey Bans Sweepstakes Casinos in Latest Crackdown

New Jersey has officially joined the continuously growing list of U.S. states that have chosen to completely ban sweepstakes casinos. 

Wagering Ban, Penalties, and Enforcement Powers 

At the end of last week, Governor Phil Murphy signed bill A5447 into law, despite strong opposition from various trade groups defending the interests of the two-currency system platforms that use “gold coins” with no money value and “sweeps coins” redeemable for cash prizes. 

The measure looking to eliminate legislation gaps that let operators run online casinos while real-money iGaming is still off-limits has been sitting on the governor’s desk for weeks now, after it was cleared by the state Legislature on June 30.

According to the governor’s office, the law does not solely establish a complete ban on the sweepstakes model of wagering outright, but also sets up the corresponding penalties for companies that continue to offer these games. 

At the same time, Murphy’s bill enforces both the Division of Consumer Affairs and the Division of Gaming Enforcement to take firm action.

No More Gray Area

While regulated online casinos are currently legal in just seven states, sweepstakes-style platforms operate in dozens more, often in questionable legal territory.

Supporters counter that sweepstakes are nothing new under the sun. They frequently point to household names like McDonald’s with the popular Monopoly campaign that offers customers buying their food a free chance to win a prize with zero expenses tied to the reward, or Publishers Clearing House’s games with redeemable tokens and free sweepstakes.

In their view, players are not technically required to pay to participate, as free play options are always available.

Different Strategies

The Garden State is now the sixth to act this year, joining Connecticut, Montana, Nevada, New York, and Louisiana. 

However, not all states adopted the same approach. For instance, New York’s bill is still awaiting Governor Kathy Hochul’s signature, while Louisiana’s Governor Jeff Landry vetoed his state’s measure, explaining that regulators were already in possession of the necessary tools. 

Both of these states, however, decided to issue cease-and-desist orders to major operators, including Australian giant Virtual Gaming Worlds.

“These actions send a clear message,” Louisiana Gaming Control Board Chair Christopher Hebert said at the time, adding the Pelican State would not tolerate illegal operators putting citizens at risk while undermining “the fairness and integrity” of the gaming industry. 

“We will continue to use every enforcement tool available to protect the public and uphold the law.”, Hebert went on.

“Wrong Solution to a Misunderstood Issue”

Before the formal signing of the New Jersey bill, former Congressman Jeff Duncan, now leading the Social Gaming Leadership Alliance, argued that the bills that passed the Legislature are “the wrong solution to a misunderstood issue.”

The Social and Promotional Games Association used an even sharper tone, declaring before the bill’s signing that Governor Murphy has the chance to “do what the Legislature would not – listen to facts, not fear.”

The group went on to say that the bill not only mischaracterises the entire industry but also “ignores data, undermines innovation,“ and jeopardizes New Jersey’s reputation as a “forward-thinking leader in tech and entertainment.”

As California considers its own ban, it’s clear the fight over sweepstakes-style gaming is far from over.