New York could bid farewell to sweepstakes casinos by 31 December

• Senate Bill 5935A has reached Governor Kathy Hochul and is awaiting her decision.
• The bill would outlaw dual‑currency online sweepstakes games and restrict support from affiliates and payment processors.
• New York’s Attorney General has already issued more than 20 cease‑and‑desist orders to unlicensed operators.

Governor Kathy Hochul faces a 31  December deadline to decide the future of Senate Bill 5935A, which seeks to ban online sweepstakes casinos across New York. The legislation, delivered to her office on 1 December, gives her the option to sign, veto, or allow the bill to lapse.

The state legislature passed the bill in June 2025. The Senate approved it on 11 June with 57 ayes and two nays, and the Assembly concurred on 17 June. Lawmakers argued that sweepstakes casinos exploit a regulatory loophole and pose potential risks to minors, problem gamblers, and the legal gaming industry’s tax revenue.

Bill targets dual‑currency systems

Senate Bill 5935A prohibits internet games that use a dual‑currency model. In these games, one currency is redeemable for cash or prizes. They include virtual slots, table games, bingo, and sports wagering.

The New York State Gaming Commission defines dual‑currency systems and holds broad regulatory authority over operators, service providers, and affiliates. The ban covers payment processors, geolocation services, and any entity knowingly supporting these platforms.

Penalties range from US$10,000 to US$100,000 per offence. Violators risk losing gaming licences.

Enforcement is shared among the Gaming Commission, State Police, and the Attorney General’s Office. Officials believe that the law will supplement existing cease‑and‑desist actions with statutory authority.

Enforcement builds on prior actions

Attorney General Letitia James has already sent more than 20 cease‑and‑desist letters to operators, prompting major platforms such as Chumba Casino, LuckyLand Slots, and Global Poker to halt activity or exit New York entirely.

The legislation formalises these restrictions. New York would join Montana, Connecticut, New Jersey, Nevada, and California in prohibiting dual‑currency sweepstakes casinos by 2025–2026. Other states, including Louisiana and Arizona, continue to rely on enforcement case‑by‑case.

Industry reactions and legislative rationale

Senator Joseph Addabbo, sponsor of the bill, has indicated that the law could pave the way for regulated sweepstakes once real‑money casinos launch in the state.

“That’s the opportunity I want to create,” Sen. Joseph Addabbo, sponsor of SB5935, told Sweepsy.

However, the Social Gaming Leadership Alliance (SGLA) has urged a veto. The group cited concerns over unclear enforcement, potential federal preemption, and possible unintended consequences for promotional activities.

Previously, Jeff Duncan, SGLA’s Executive Director, commented on the situation:

“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,” said Duncan.

Hochul may sign, veto, or allow the bill to lapse. A veto can be overridden; the Senate passed the legislation with veto‑proof support. Market watchers note that a decision could influence investor behaviour and operator strategy nationwide.

U.S. sweepstakes‑casino landscape

Across the United States, five states now have formal bans or effective prohibitions on sweepstakes casinos using dual‑currency systems.

• California: AB 831, signed October 2025, bans dual‑currency sweepstakes casinos from 1 January 2026. Violations carry misdemeanour charges, fines up to US$25,000, or up to one year in county jail. Service providers supporting illegal operations are also liable.
• Montana: SB 555, effective 1 October 2025, outlaws internet platforms with virtual currencies redeemable for cash or prizes. Violations may be felonies, including prison terms and fines.
• Connecticut: SB 1235, effective 1 October 2025, prohibits dual‑currency sweepstakes casinos and associated promotional operations.
• New Jersey: AB 5447 / S4282, effective August 2025, defines dual‑currency sweepstakes platforms as illegal. Enforcement is through state gaming and consumer protection agencies.
• Nevada: SB 256, mid‑2025, strengthens enforcement against unlicensed dual‑currency sweepstakes casinos. Many operators withdrew from the state following regulatory action.

Across these states, platforms that allow players to redeem virtual coins for cash or prizes face steep fines, licence revocations, and potential criminal liability. Operators are shifting to “social‑only” models without cash‑out features to comply.

Implications for operators and regulators

The wave of 2025 legislation demonstrates a move from informal enforcement to comprehensive statutory bans. For operators, these laws necessitate market exits, product adjustments, or full licensing compliance.

Regulators gain statutory authority to oversee previously grey‑market operations, enforce responsible‑gaming measures, and protect consumers. Investors may anticipate reduced market opportunities in sweepstakes casinos but could see opportunities in licensed digital gambling or traditional casino markets.

For New York, the governor’s decision will signal the state’s approach to online gambling, potentially influencing other jurisdictions considering dual‑currency sweepstakes casinos. Stakeholders across the U.S. will be monitoring the outcome closely.