Anti-Sweeps Bill Advances Through Third New York Assembly Committee

New York’s legislative movement to ban online sweepstakes casinos took another small step forward in the Assembly on Friday when Assemblyperson Carrie Woerner’s bill passed unanimously in the Ways and Means Committee.

Ways and Means was the third committee A06745 passed by unanimous vote. It originally moved forward from the Racing, Wagering, and Gaming Committee on April 30 by an 11-0 vote; and the Codes Committee approved the bill by a 21-0 count May 28.

The companion bill in the Senate, S05935 sponsored by Sen. Joseph Addabbo, is currently waiting to be heard on the floor of the upper chamber. New York is aiming to join Louisiana, Connecticut, and Montana as states that have passed anti-sweeps bills during this legislative calendar year.

The bills in Louisiana and Connecticut are awaiting the signatures of their respective governors, while Montana’s bill will take effect Oct. 1 after being signed into law by Gov. Greg Gianforte in late March.

The New York AG weighs in

Online casino operators using sweepstakes prizing took another hit Friday when New York Attorney General Letitia James announced her office sent cease-and-desist letters to 26 operators in the state regarding selling sweeps coins to New York players.

“Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” James said in a statement. “I thank the New York State Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.”

“These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful,” said New York State Gaming Commission Chairman Brian O’Dwyer. “I have been very vocal about the need to crack down on these operations, and I am thrilled that Attorney General James has taken this significant step to eradicate the illegal gambling market. We encourage those of age who wish to gamble to do so with legal operators.”

The Social and Promotional Games Association (SPGA), which has been at the forefront trying to challenge legislative efforts banning sweepstakes casinos, said in a statement it is “disappointed by New York Attorney General Letitia James’ mischaracterization of sweepstakes platforms as ‘illegal’ and ‘dangerous.'”

The SPGA countered that sweepstakes promotions “are not gambling under federal law” and count New York among states where they are legally permitted. The association also said its outreach to state lawmakers and regulators “has gone ignored.”

Lastly, the SPGA added, “It’s disappointing to see a blanket enforcement action taken without meaningful dialogue or effort to distinguish between compliant companies and truly illegal operators. This approach stifles innovation, limits consumer choice, and disregards the legal status of sweepstakes promotions.”

Empire State-sized tailwinds

The fact that both Addabbo and Woerner’s bills have progressed through their respective legislative chambers with practically no opposition implies New York will be enable to enact a sweeps ban.

VGW, which operates Chumba Casino, Luckyland Slots, and Global Poker, has reportedly put plans in place to remove its sweeps platform from the New York marketplace over the course of the summer. It was among the 26 operators issued cease-and-desist letters from James’ office.

Both Addabbo and Woerner contributed statements to the press release from the AG’s office, with Addabbo taking the more aggressive stance of the two.

“These so-called sweepstakes casinos not only put individuals at risk of fraud and financial exploitation, but they also create dangerous pathways for gambling addiction, especially among minors,” he said. “This is not about taking away anyone’s livelihood, it’s about protecting New Yorkers and working toward a safer, regulated online gaming environment for age-appropriate individuals.

“I commend Attorney General James and her office for their dedication towards protecting our residents and for recognizing the urgent risks posed by these illegal platforms.”

Woerner added her concerns about how “online sweepstakes games can serve as the on-ramp to problem gambling for teenagers, particularly,” and said she is “grateful for the work of Attorney General James and her staff for shutting down 26 of these games.”

Addabbo continues to file bills

Though the New York legislative session is scheduled to end Friday, that has not stopped Addabbo — the point person for all things gaming in the Senate — from filing bills. He introduced S08352 on Wednesday, which would amend existing New York State insurance law to require that all insurance policies offering medical coverage include outpatient services for the diagnosis and treatment of problem gambling.

“As New York’s gaming landscape continues to grow, our commitment to protecting those at risk of addiction has to expand also,” Addabbo said. “Problem gambling is a public health issue, and this legislation is about fairness, compassion, and proactive care. It’s time we treat problem gambling with the same seriousness and coverage parity as other behavioral health conditions.”

The bill addresses an insurance gap in which gambling treatment is covered only if it is associated with a co-occurring substance use disorder. In a release from his office, Addabbo noted that the New York State Office of Addiction Services is not reimbursed by most insurance providers unless a substance use order is diagnosed.

Addabbo’s bill was referred to the Senate Rules Committee, and A8518, a companion bill in the Assembly filed by Assemblyperson Phil Steck, is currently in the Insurance Committee of the lower chamber.