The Garden State is moving even closer to outlawing sweepstakes-style online casinos, often referred to as “sweeps casinos.”
AB 5447 Reached the Consumer Affairs Committee
On Thursday, Assembly Bill 5447 cleared another legislative hurdle, passing through the Assembly Committee and heading next to the Consumer Affairs Committee.
Lawmakers could still introduce changes, but the intent is clear: to rein in a growing and largely unregulated corner of the online gambling market.
Assemblyman Clinton Calabrese, who first proposed legislation on this issue in January, originally aimed to regulate sweepstakes casinos.
However, by March, his approach shifted, and AB 5447 now seeks to prohibit them entirely.
Operators Would Face Penalties
With the bill’s full text now published, the updated version defines these platforms as illegal and proposes significant penalties for operators who ignore the law.
Calabrese and fellow sponsor Assemblyman Sterley Stanley have included a detailed explanation of what qualifies as a sweepstakes model.
Accordingly, the bill defines sweepstakes as “a promotional, advertising, or marketing event, contest, or game, whether played online or in person, in which something of value, such as a prize or prize equivalent, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.”
$100,000 Fine for First Offence
In other words, any platform that allows players to purchase virtual currency with the potential to redeem prizes, even if no direct gambling takes place, would fall under this ban.
Enforcement would be handled jointly by the Division of Consumer Affairs and the Division of Gaming Enforcement (DGE), both of which are already active in regulating New Jersey’s legal online casinos and sportsbooks.
Under the bill, violators could face a $100,000 fine for a first offense and up to $250,000 for a second. Legal action could also follow.
There is one narrow exception. Sweepstakes could continue to exist in physical settings if they are completely free to play or tied to small food or beverage purchases, limited to non-alcoholic drinks or snacks under $20.
With legal online gambling well established in the state, lawmakers say this bill aims to protect consumers and ensure fairness in a rapidly evolving market.
As the bill progresses, it’s a sign that New Jersey is drawing a firm line between regulated, licensed operators and the grey-market platforms that have so far avoided oversight.
The U.S. state is not the only one to openly scrutinize these types of platforms, as Mississippi, Maryland, Connecticut, and New York are also pondering embracing similar legislative measures.