A seismic shift has occurred in the online gaming landscape of New York. Governor Kathy Hochul recently signed Senate Bill 5935 into law, effectively outlawing online sweepstakes casinos within the state – making New York the sixth to do so.
This isn’t a simple restriction on players; the law targets the very core of these operations. It goes after the sweepstakes casino operators themselves, and crucially, the supporting infrastructure that keeps them running, including payment processors, geolocation services, and even media partners.
The penalties for violating this new law are substantial. Anyone found in breach faces fines ranging from $10,000 to a staggering $100,000 *per violation*. Furthermore, individuals or entities holding gaming licenses risk losing them, or being permanently barred from obtaining one in the future.
While this crackdown targets sweepstakes casinos, it’s important to note that licensed online sports betting remains legal in New York. The distinction is clear: regulated, taxed sports wagering is permitted, while the sweepstakes model is now officially prohibited.
The legislation grants significant enforcement power to key state entities. The New York State Gaming Commission, the State Police, and the Attorney General will all be responsible for ensuring compliance and pursuing those who attempt to circumvent the law.
The impact of the bill was almost immediate. Within hours of its enactment, several sweepstakes-style platforms reportedly began restricting access for New York residents. Users of popular sports prediction apps, Novig and ProphetX, took to social media to report being locked out of the services.
This move is part of a growing national trend. California has already enacted a similar ban, and numerous other states are actively issuing cease and desist orders to sweepstakes casino operators. Regulators are increasingly scrutinizing these platforms, viewing them as a form of unauthorized online gambling.
The Attorney General, Letitia James, signaled this intent earlier in the year, sending cease and desist letters to over two dozen sweepstakes platforms, including well-known names like Chumba and Fliff. The bill passed in June, but only reached the Governor’s desk in December, ultimately becoming law on Friday.
Industry groups fiercely opposed the legislation. The Social Gaming Leadership Alliance argued that these online social games contribute over $230 million annually to New York’s economy, providing a significant economic boost.
They positioned these games as vital community entertainment hubs, and warned of the consequences of a ban. The Alliance’s Executive Director, Jeff Duncan, urged Governor Hochul to embrace “smart regulation” rather than eliminate a “thriving, responsible industry” and its associated economic benefits.
Despite these appeals, Governor Hochul chose to prioritize a stricter regulatory environment, aligning New York with a growing number of states that have rejected the dual currency sweepstakes model. The future of online sweepstakes gaming in New York is now definitively closed.
