Sweepstakes casinos have become a popular choice for New York players seeking online slot gaming, offering a legal alternative to offshore casinos through a unique dual-currency model. However, the introduction of Senate Bill 5935 by Senator Joseph Addabbo Jr. in March 2025 threatens to reshape this landscape by targeting these platforms for prohibition. This article examines the bill’s implications, the nature of sweepstakes casinos, and the evolving challenges for players caught in a shifting regulatory environment.
What Are Sweepstakes Casinos?
Sweepstakes casinos operate differently from traditional online casinos, leveraging federal sweepstakes laws to provide casino-style gaming in states where real-money online gambling is restricted. Platforms like Chumba Casino, Pulsz, and WOW Vegas use a dual-currency system:
- Gold Coins: Purchased for entertainment purposes, these coins allow players to enjoy games without cash prizes.
- Sweeps Coins: Provided as bonuses with Gold Coin purchases or through free entries (e.g., mail-in offers), these can be used to play games with the potential to redeem winnings for real money or prizes.
This model exploits existing sweepstakes laws, allowing operators to offer casino-style games—such as slots, poker, and blackjack—legally in most U.S. states, including New York, where real-money online casinos remain unlicensed. Other platforms, like Horseplay (using horse racing outcomes) and Kalshi (leveraging futures trading), employ similar legal workarounds to offer gambling-like experiences.
Senate Bill 5935: A Crackdown on Sweepstakes Casinos
Introduced on March 4, 2025, Senate Bill 5935 aims to ban online sweepstakes games that simulate casino-style gaming through a dual-currency system offering cash prizes or equivalents. Key provisions include:
- Definition of Sweepstakes Games: The bill targets any online game, contest, or promotion accessible via the internet or mobile devices that uses a dual-currency system and mimics casino games, including slots, video poker, table games, lottery-style games, bingo, or sports wagering.
- Penalties: Violators face fines of $10,000 to $100,000 per offense and potential loss of gaming licenses. This applies not only to operators but also to supporting entities like payment processors, geolocation providers, and media affiliates.
- Enforcement: The New York State Gaming Commission and Attorney General’s office are empowered to investigate violations and issue cease-and-desist orders.
The bill passed the Senate on June 11, 2025, with a 57-2 vote and the Assembly unanimously on June 17, 2025, and now awaits Governor Kathy Hochul’s signature. If signed, it will take effect immediately, making New York the fourth state to ban sweepstakes casinos, following Montana, Connecticut, and Nevada.
Why the Push for a Ban?
Senator Addabbo, a vocal advocate for regulated online gambling, argues that sweepstakes casinos operate in a legal gray area, evading consumer protection, responsible gaming, and anti-money laundering regulations required of New York’s licensed gambling industry. These platforms are untaxed and unregulated, creating unfair competition for the state’s legal casinos, which contribute significant tax revenue (e.g., over $1 billion from mobile sports betting from March 2024 to March 2025).
Additional concerns include:
- Lack of Oversight: Unlike regulated casinos, sweepstakes platforms often lack robust Know-Your-Customer (KYC) and Anti-Money Laundering (AML) protocols, raising risks of fraud and underage gambling (some allow players as young as 18).
- Consumer Vulnerability: The absence of responsible gaming measures may expose players to exploitation or problem gambling.
- Economic Impact: Unregulated operators reportedly generated $8 billion in revenue in 2025, diverting potential tax dollars from state coffers.
New York Attorney General Letitia James has already taken action, issuing cease-and-desist letters to over two dozen sweepstakes operators, including Chumba and Fliff, in June 2025, signaling a broader crackdown.
Impact on New York Players
The push to ban sweepstakes casinos has significantly disrupted the gaming landscape for New Yorkers. Since March 2025, major platforms like Pulsz, McLuck, Hello Millions, PlayFame, Jackpota, Mega Bonanza, SpinBlitz, and Blazesoft brands have ceased operations in the state, preempting potential legal repercussions. Others, like High 5 Casino, are phasing out services to allow players to redeem remaining Sweeps Coins.
Player Challenges
- Limited Access: With sweepstakes casinos exiting, New Yorkers lose a popular avenue for online casino-style gaming. Real-money online casinos are legal only in states like New Jersey, Pennsylvania, Michigan, and Delaware, leaving New York players with few legal alternatives.
- Disruption of Trust: Sweepstakes casinos, despite their unregulated status, have garnered strong player approval, with platforms like Chumba, Crown Coins, Fortune Coins, and WOW Vegas boasting average Trustpilot ratings above 4.0 from tens of thousands of reviews. The sudden departure of these sites leaves loyal players frustrated and without comparable options.
- Uncertainty: While some operators like Chumba and Funzpoints continue to serve New York pending the bill’s final outcome, players face uncertainty about future access.
Broader Context
The Social and Promotional Games Association (SPGA) opposes the bill, arguing it mischaracterizes sweepstakes gaming and threatens legitimate businesses, such as promotional sweepstakes by companies like McDonald’s or Marriott. The SPGA advocates for regulation over prohibition to preserve jobs and economic benefits. Critics, including the SPGA, also warn that the bill’s vague definition of “dual-currency system” (now left to the New York State Gaming Commission to define) could inadvertently impact non-gambling promotions, stifling innovation and harming small businesses.
The Bigger Picture: A Shift Toward Regulation?
The crackdown on sweepstakes casinos coincides with Senator Addabbo’s push to legalize real-money online casinos through Senate Bill 2614, which proposes a 30.5% tax rate and $10 million operator license fee to address New York’s budget deficits ($3 billion in 2026, $6 billion in 2027). However, progress on iGaming legalization remains stalled due to opposition from labor unions and the slow pace of awarding downstate retail casino licenses, with a deadline for applications set for June 27, 2025.
If S5935 becomes law, New Yorkers may face a gap in legal online casino options until regulated iGaming is approved. This could push players toward unregulated offshore platforms, including crypto casinos, which pose similar risks to sweepstakes sites but lack even the federal sweepstakes framework.
