Prohibition on Sweepstakes Casinos is signed into law in New Jersey
As many states examine sweepstakes casinos, New Jersey banned the platforms after Governor Phil Murphy signed a bill in August.
New Jersey bans sweepstakes casinos © Boone Digital
Key Facts:
- New Jersey governor signs bill into law that prohibits sweepstakes casinos
- Connecticut, New York among other states to have banned sweepstakes gaming platforms
- State also banned proxy betting such as lottery courier services
Governor Phil Murphy signed legislation prohibiting sweepstakes-style casino operations in New Jersey on August 15. The new law targets unregulated online gambling models that have operated in a legal gray area.
The bill, A5447, moved through the legislature with notable speed. Authored by Assemblyman Clinton Calabrese, it gained approval from both the Assembly and Senate on June 30 after its introduction in January.
Governor Murphy enacted the law 46 days after its legislative passage. His signature during the summer recess expedited a measure that was poised to become law automatically when the session resumed.
The ban is designed to support New Jersey’s regulated online casino market. It ensures that online casino gaming occurs exclusively through state-licensed and taxed operators, protecting the established industry.
Under the statute, a “sweepstakes” is defined as a promotional game where a prize of value is awarded. The law specifically targets the dual-currency systems used by these online platforms.
Oversight will be handled by the Division of Gaming Enforcement and the Division of Consumer Affairs. These two state bodies are now responsible for enforcing the prohibition against such operations.
Significant financial penalties await any violators. A first offense can result in a fine of up to $100,000, while subsequent offenses may incur a penalty as high as $250,000.
The law includes a narrow exemption. Promotions can proceed if they are completely free to enter and the prizes are low-value merchandise, such as trinkets not exceeding $20 in value.
Proxy betting now unlawful in New Jersey
Addressing a second issue, the bill signed by Murphy also prohibits a proxy betting practice that has been meddlesome to New Jersey regulators.
The new law bans any wager being placed by one individual for another that places at risk “property with a value of $1,000 or more, having agreed to pay 10 percent or more of the proceeds of the gambling activity to another”.
Previously, a handful of wagers have been placed in New Jersey by a person for someone else, either located in another state or even one who does not qualify for sports wagering under gaming regulations. Those parties would agree on a commission for the person who placed the bet.
