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Read Full BioSweepstakes casino advocate groups, the SPGA and the SGLA, have urged Governor Kathy Huchal to veto a bill banning dual-currency gambling platforms in New York.
New York’s Assembly passed the bill on Tuesday, which will prohibit any platform that “utilizes a dual-currency system of payment allowing the player to exchange the currency for any cash price, cash award or cash equivalents, and simulates casino-style gaming”.
Operators that violate the rules face fines ranging from $10,000 to $100,000.
The bill was first proposed in the Senate by Sen. Joseph Addabbo and was voted 57-2 in favor last week, leaving it only needing Gov. Huchal’s signature.
Bill Criminalizes Innovation, Says SPGA
Two prominent sweepstakes advocate groups, the Social and Promotional Gaming Association (SPGA) and the Social Gaming Leadership Alliance (SGLA), have urged Huchal to veto the bill.
A statement issued on the SPGA’s website read: “The Social and Promotional Games Association (SPGA) strongly urges Governor Kathy Hochul to veto SB5935, a shortsighted bill that threatens to kill investment, stifle innovation, and undermine New York’s position as a national leader for tech and digital entertainment.”
The statement continued, “This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation.”
“Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle,” the SPGA adds.
The statement then cites the example in Louisiana, where Governor Jeff Landry vetoed a similar bill banning sweepstakes casinos last week.
Landry said the legislation, which had been unanimously backed in both chambers, was unnecessary as the Louisiana Gaming Control Board already has sufficient authority to target illegal gambling sites.
As proof of this, the Board issued 40 cease-and-desist letters to a variety of offshore betting sites and sweepstakes operators this week.
SGLA Says Bill Will Hurt Business
The SGLA issued a similar statement criticizing the bill. The group, established last month, is led by sweepstakes operator VGW, the parent company of Chumba Casino, LuckyLand Slots, and Global Poker.
SGLA Executive Director and former Congressman Jeff Duncan said, “By advancing legislation that was drafted based on a fundamental misunderstanding of our industry and aggressively promoted by stakeholders with a competitive interest in shutting down these platforms, New York residents could lose access to popular, free-to-play online games enjoyed by millions.”
NY Gaming Commission Given Too Much Power
Both the SPGA and SGLA are concerned about the power the bill gives to the New York Gaming Commission. An amendment in the Senate provides the Commission with the authority to decide what businesses constitute a dual-currency system.
The SPGA statement noted, “Troublingly, the bill leaves the definition of what constitutes an offending game entirely at the discretion of the State Gaming Commission, an unelected body.”
Duncan of the SGLA similarly stated, “Of particular concern, the discretionary powers handed to the Gaming Commission under this bill could restrict use of a popular marketing tool, hurting businesses and the New York economy in ways lawmakers did not intend.”
Sweepstakes Platforms Already Exiting New York
Even before the legislation had been passed in the Senate and Assembly, many sweepstakes operators announced their withdrawal from the state.
New York’s Attorney General, Letitia James, also issued cease-and-desist letters to 26 operators, including Chumba Casino, Luckyland, and Global Poker, run by VGW. The operator announced it will exit the Empire State in response.
James commented that “online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances.”
Whether Gov. Huchal signs the legislation or not, therefore, seems largely irrelevant as the state, like in Louisiana’s case, is already using its authority to target sweepstakes casinos. It may, however, set a precedent and lead other states to take more action against the operators, who have been able to grow rapidly through legal loopholes.
Montana became the first state to pass legislation banning the platforms last month, and Connecticut has since followed.
