New Jersey moves to regulate sweepstakes casinos with landmark bill

New Jersey Assemblyman Clinton Calabrese has introduced Bill A5196, a groundbreaking proposal to regulate sweepstakes casinos in the state. If passed, New Jersey would become the first state to legalize and regulate sweepstakes casinos, a rapidly growing yet currently unregulated segment of online gaming.  

Sweepstakes casinos allow players to engage in casino-style games like slots and table games using free or purchased tokens instead of cash. This model enables these platforms to sidestep traditional gaming regulations, sparking criticism over consumer protection and tax compliance issues.  

“Sweepstakes casinos have operated in a regulatory gray area, which has led to significant challenges, including consumer protection concerns, underage gambling, and economic losses for the state,” said Calabrese to Gaming Today. “Recognizing these issues, I have introduced this legislation to address the lack of oversight for these platforms.” 

Under the proposed legislation, sweepstakes casinos would be classified as internet gaming operators, requiring licensure and compliance with state gaming laws. Oversight would fall under the New Jersey Division of Gaming Enforcement, which would regulate operations and restrict unauthorized platforms. Additionally, regulated sweepstakes casinos would need to partner with New Jersey’s land-based casinos, as mandated by state law for online gaming operators.  
  
The bill could reshape the sweepstakes casino landscape in New Jersey. Licensed operators would need to pay fees, potentially driving unregulated companies out of the market. Partnerships with land-based casinos may also face resistance, as traditional operators often oppose the presence of sweepstakes platforms.  

The proposed framework aims to enhance consumer protection by addressing concerns over underage gambling, player safety, and financial transparency. This move is seen as a critical step toward creating a safer and more accountable gaming environment.  
  
The Social and Promotional Games Association (SPGA), a leading advocate for responsible gaming practices, has voiced its support for the bill. “The SPGA welcomes Assemblyman Calabrese’s bill. The SPGA and its members are advocates for clear regulations that enable transparent, innovative, and responsible social and promotional gaming experiences,” the organization said in a statement.  

Camilla Wright, an SPGA spokesperson, highlighted the importance of player safety. “The pillars of the SPGA Code of Conduct highlight the technology and processes already in place at most social sweeps operators to ensure that the millions of adults who enjoy these games do so in a safe and reliable environment,” she said.  

The bill follows a recent lawsuit filed by New Jersey resident Julian Bargo, who accused multiple sweepstakes casinos of deceptive practices. The lawsuit also targeted tech giants Google and Apple for hosting the platforms, alleging violations under the Racketeer Influenced and Corrupt Organizations (RICO) Act.  

Bargo claimed the platforms disguise themselves as social casinos while purposefully misleading regulators and players about the true nature of their procedures. 
 
For the bill to become law, it must clear committee reviews, pass votes in the General Assembly and State Senate, and receive Governor Phil Murphy’s signature. Amendments to the bill may emerge during the legislative process.