Sweepstakes Casinos are Prohibited in NJ due to a Landmark Ban
New Jersey has made history by becoming the largest gaming market to ban sweepstakes casinos by law.
New Jersey sweepstakes ban has been approved. © Boone Digital
Key Facts:
- New Jersey law prohibits sweepstakes casinos from operating in the Garden State
- Bill was passed in state legislature with bipartisan support
- New Jersey is the latest state to pass a law to force sweepstakes casino apps and websites out of business
- Several states are pondering similar bans on sweepstakes casinos
On August 15, New Jersey Governor Phil Murphy affixed his signature on legislation banning sweepstakes casinos. This makes New Jersey the sixth state to pass a prohibition on such games.
Murphy signed Assembly Bill 5447 into law in an informal ceremony in the state Capitol last Friday. The bill was passed in June with bipartisan support.
Sweepstakes casinos are gaming apps that run on mobile devices or computers via a web browser. The sweepstakes casinos allow users to play casino-style games without having to fund an account with real money.
Because sweepstakes casinos rely on coins or tokens for game-play rather than money, the platforms are under scrutiny in many states by regulators and lawmakers.
The New Jersey law bans games that use a sweepstakes model of wagering. It also outlines the penalties that can be implemented if a company breaks the law.
Lastly, it assigns the Division of Consumer Affairs and the Division of Gaming Enforcement as responsible for the enforcement of the ban.
NJ Ban Could Prompt Other States to Take Action Against Sweepstakes Casinos
The debate over sweepstakes casinos centers on whether these sites are legitimate contests or disguised casinos. Opponents argue that the dual-currency system is a sham designed to circumvent gambling laws.
Critics claim that by allowing players to buy one type of coin to receive “sweepstakes” coins redeemable for cash, these companies are essentially offering real-money gambling in dozens of states that have not approved it.
Nevada, Montana, and three other states have also passed bans on sweepstakes. There are at least six other states considering bans.
Several states have taken the step to use cease-and-desist letters to force sweepstakes casino operators out. Louisiana passed a ban earlier this year, but the bill was vetoed by its governor, who chose instead to order law enforcement to issue cease-and-desist orders.
Defenders of sweepstakes casinos maintain that they operate like any other promotional sweepstakes, pointing to familiar examples from companies like McDonald’s or Publishers Clearing House.
Their central argument is that since there is no requirement to buy anything and players can request free credits to play, the model does not legally qualify as gambling.
