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TRENTON, N.J. — The New Jersey Senate State Government, Wagering, Tourism & Historic Preservation Committee has advanced a bill to ban unlawful gambling operations and regulate sweepstakes practices, while significantly expanding enforcement powers and penalties for violations.
Senate Bill No. 4282, as amended and reported out of committee on May 29, specifically targets illegal “sweepstakes” gambling schemes, including those disguised as promotional contests either online or in-person. The legislation establishes strict guidelines for lawful sweepstakes and prohibits prize-based systems involving dual-currency models or casino-style simulations unless they meet narrowly defined criteria.
The bill defines a sweepstakes as any promotional or marketing event where participants may win something of value, either directly or through systems involving redeemable credits or tokens. Under the bill, sweepstakes may only be permitted if free entry is available and any purchase requirements are limited to low-cost, non-alcoholic items, excluding digital credits or tokens exchangeable for money or goods.
To further prevent abuse, the legislation requires sweepstakes to clearly disclose rules, prize odds, and prize details. Participants under 18 would be barred from claiming prizes exceeding $1,000 without a parent or guardian’s consent, and prize values must be reported as taxable income.
Expanded definition of gambling and new criminal penalties
The bill also broadens the definition of “gambling” under state law to include agreements where something of value is wagered on the outcome of contests of chance or sports events, even indirectly. It further criminalizes maintaining “online gambling resorts”—websites or apps where users can engage in illegal gambling—and increases the associated penalty to a third-degree crime.
Conduct considered illegal under the bill includes manipulating sporting events by offering compensation to players, coaches, or officials to underperform or alter game outcomes, as well as placing bets using insider information not available to the public. Using someone else’s gaming account or placing wagers on their behalf, known as proxy betting, would also be a punishable offense.
Regulatory authority and enforcement mechanisms
The Division of Consumer Affairs (DCA) would oversee all sweepstakes-related enforcement, while the Division of Gaming Enforcement (DGE) would handle other unlawful gambling matters. Both agencies are granted authority to seek injunctive relief, impose civil penalties—starting at $100,000 for a first offense—and order restitution, including double repayment to senior citizens.
Additional enforcement tools include subpoena powers, cease and desist orders with $25,000 penalties for violations, and the authority to place liens on the property of violators. The bill also enables courts to revoke licenses of noncompliant parties.
Committee amendments expand definitions
The committee amendments broadened the bill’s scope to include any game that mimics or simulates casino-style gaming or sports betting. The definition of “prize or prize equivalent” now encompasses physical and virtual items that may be sold, redeemed, or exchanged for monetary value, directly or indirectly.
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