A bill in New Jersey that proposes banning online sweepstakes casinos advanced in the Assembly on Thursday after two months of inactivity.
The Assembly’s Tourism, Gaming, and the Arts Committee voted unanimously in favor of bill A5447. Assemblymen Clinton Calabrese and Sterley Stanley introduced the bill in March, aiming to stop the spread of sweepstakes casinos in the state.
Legislators have had to come up with a definition that encompasses the sweepstakes model without impacting legitimate businesses. Prior to passing the bill through the committee, an amendment was made to add “any game that mimics or simulates casino-style games or sports wagering” to the bill’s definition of what it is prohibiting.
The bill will now move to the Assembly Consumer Affairs Committee. The New Jersey legislative session runs until the end of the year, giving plenty of time for the bill to make it through all the stages to legal approval.
Sweepstakes casinos exploring legal loophole
Calabrese, one of the bill’s sponsors, commented that “companies have been exploiting a certain loophole” to run sweepstakes casinos. Stephan Finkel, the director of legislative affairs for the Attorney General’s office, added that sweepstakes have not been approved by voters in New Jersey. State law requires any gambling to be voted for in a referendum. As such, this form of gambling is unconstitutional, he argued.
Finkel went on to stress the importance of getting the terminology right to crack down on the current loophole. He added, “The legislature can be very clear in saying, ‘this is what isn’t allowed in our gambling laws.’”
The Sports Betting Alliance (SBA) also added its support to the move against its rivals. A representative for the SBA, Eric Scheffler, commented that the sweeps model is “a legal maneuver that allows them to replicate the experience of online casinos while avoiding the licensing and regulation and taxation structure set up by the state policymakers across the country.”
SBA members, which include DraftKings, BetMGM, and FanDuel, are keen to protect their revenue streams from legal casino gaming.
New Jersey casino gaming
New Jersey online casinos have been legal since 2013, and in this time, licensed operators have contributed $1.78 billion in tax revenue. Last year saw a record-breaking $2.39 billion in revenue, marking a 24.1% increase from the $1.92 billion reported in 2023.
Sweepstakes casinos have also been on the rise, however, and unregulated casino operators generated an estimated $1.5 billion in revenue last year. The Responsible Gaming Task Force in New Jersey stated that “28% of New Jerseyans have reported engaging in one or more forms of unregulated or illicit gambling in the past 24 months.”
This legislation aims to clamp down on the growing market while protecting the state’s legal industry.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling.
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