Ban on Sweepstakes Casinos Goes to New Jersey Governor for Signature
A bill prohibiting sweepstakes casinos passed both the state assembly and senate in New Jersey on July 1st. It now awaits a signature from the governor to become law.
New Jersey lawmakers passed ban on sweepstakes casinos.
Key Facts:
- New Jersey legislature overwhelmingly passed a bill that bans sweepstakes casinos
- Governor Phil Murphy of New Jersey can now sign prohibition on sweepstakes casinos into law
- New Jersey Division of Gaming Enforcement and the Division of Consumer Affairs would be responsible for oversight of the market
The State of New Jersey is a step closer to a ban on so-called sweepstakes casinos after its legislature passed a bill to prohibit those mobile apps.
On July 1st, both the New Jersey State Assembly, by a vote of 69-10, and the Senate (vote of 34-5), passed a bill that bans sweepstakes casinos. Those votes occurred within minutes of each other as the legislative session neared a close.
Assembly Bill 5447 (A5447) is clear on sweepstakes casino operators:
Sweepstakes’ means 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.– Assembly Bill 5447, New Jersey State Assembly, Copy of A5447
The move to ban sweepstakes casinos comes after some lawmakers were in favor of legalizing them as recently as January. New Jersey State Assemblyman Clinton Calabrese introduced a bill in January that allowed sweepstakes casinos. In March he flipped.
Sweepstakes casinos utilize digital currency schemes like coins and tokens to allow players to enjoy slot machines and casino-style games online. Since the apps do not place consumer funds at risk, they are technically not considered online casino gaming.
The New Jersey ban says sweepstakes casinos are defined as “casino-style games such as slot machines, video poker, table games such as roulette, blackjack, craps, and poker; lottery games such as draw games, raffle, bingo, and keno; and sports wagering”.
If the state finds that sweepstakes casino operators defy the law, it can levy fines as large as $100,000 for the first offence, and $250,000 for subsequent offences under the bill that awaits action from Gov. Murphy.
States are challenging sweepstakes casinos because of the nature of their “grey area” in gaming. New Jersey is the sixth state to pass a bill to outlaw them. Many other states are taking legal action to halt them: Mississippi, Michigan, and Maryland have sent cease-and-desist letters to operators.
New Jersey’s neighbor New York passed a bill that prohibits sweepstakes casinos last week. Perhaps as a reaction to that decision late last month, New Jersey lawmakers were eager to push through a ban and send it to Gov. Murphy.
Murphy is expected to sign the New Jersey sweepstakes casino ban into law this week. The governor, a Democrat, has supported the cautious expansion of gaming in his state. New Jersey has legal online casinos, and is one of just seven states that allow them.
