New Proposal Seeks Full Ban on Sweepstakes Casinos in NJ

In the last few years, the growing popularity of sweepstakes drew scrutiny by lawmakers across the United States. While several states have already taken strict action against sweepstakes casinos by filing legislation, lawmakers in others are yet to take action.

One state that recently saw legislation proposing the regulation of sweepstakes, now faces a proposal calling for their complete ban. That’s the case for New Jersey, one of the major US gambling markets that offers a wide range of legal gambling activities.

New Jersey Pivots from Regulating to Banning Sweepstakes

It was earlier this year when Rep. Clinton Calabrese, a Democrat, introduced a proposal that sought to regulate sweepstakes casinos. This was a rather different approach on the popular activity, compared to other states that have pushed the outright ban on sweepstakes.

However, in an unexpected turn of events, Rep. Calabrese filed a new proposal, seeking to ban sweepstakes casinos. The proposal, Assembly Bill 5447 (AB 5447), calls to prohibit the sweepstakes model of gambling. At the same time, the newly filed proposal seeks to overhaul the penalties applicable for illegal gambling.

Under AB 5447, the Division of Consumer Affairs and Division of Gaming Enforcement would be in charge of ensuring that no operator offers the sweepstakes model. The same regulatory body would also be in charge of enforcing penalties and combatting unlawful gambling practices in New Jersey.

If lawmakers take action, New Jersey may become the latest state to consider enforcing a ban on sweepstakes casinos. Similar effort is led in California, as well as New York, where lawmakers seek to snuff out sweepstakes. Efforts that may result in the ban of sweepstakes are also led in Florida, as well as Maryland and Mississippi, among other states.

The Offering of Sweepstakes Casinos Raises Concerns

Sweepstakes have become a hot topic in a number of states, particularly regarding the way such operators offer their services. Unlike online casinos, sweepstakes operators enable their customers to participate in casino-style games online by purchasing virtual coins. In some cases, those games can award real money prizes.

This mechanic distinguishes sweepstakes from online casinos where players play real money with a chance to win real money. While in reality, the mechanic is no different, as far as regulation goes, sweepstakes casinos operate across the country without much hassle, avoiding licensing fees and regulations which apply to online casinos.

It’s not only the games that sweepstakes casinos offer that raise concerns. The lack of relevant player protection and responsible gambling tools pose a threat for consumers who may be at risk of developing problem gambling. At the same time, missing regulation makes it more difficult for patrons to file disputes in certain cases.

Equally as concerning, by operating in a legal grey area, sweepstakes do not contribute by paying taxes or license fees. In contrast, online gambling operators available in several states across the country pay taxes on their revenues and must secure a license in order to offer their services.