New Jersey comes closer to banning sweepstakes casinos

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New Jersey has become the latest state to introduce legislation prohibiting online sweepstakes casinos after the Tourism, Gaming, and Arts Committee passed a bill targeting the platforms.

The bill, A5447, sponsored by Assemblymen Clinton Calabrese and Sterley S. Stanley, and co-sponsored by Assemblywoman Margie Donlon, would target social casinos that use virtual currency for cash prizes and ban them from operating in the state.

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If passed, the legislation would introduce new penalties for online operators caught associating with the sweepstakes model and authorize the Division of Consumer Affairs and the Division of Gaming Enforcement to enforce the new regulations.

The Director of Legislative Affairs for the New Jersey Attorney General’s Office, Stephan Finkel, said, “Unregulated gaming, not only is it unconstitutional, it puts people at risk.”

In addition, a representative of the Sports Betting Alliance, Eric Shuffer, added that sweepstakes take advantage of unregulated loopholes by offering users in-game currencies.

“It’s essentially a legal maneuver that allows them to replicate the experience of online casinos while avoiding the licensing-regulation-taxation structure,” Shuffler said. “There are no guarantees that customer funds will remain secure, that winnings will be paid out.”

New Jersey follows in the footsteps of other states that have introduced similar legislation, including Connecticut and New York. Although earlier in the week, a bill banning sweepstakes failed in Florida.

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