Murphy Signs New Jersey Sweeps Ban Into Law

Gov. Phil Murphy signed A5447 and S4282 into law Friday, making New Jersey the fourth state this calendar year to enact legislation banning online sweepstakes casinos.

The Garden State joined Nevada, Montana, and Connecticut as those that have banned online sweepstakes gaming via legislature.

The Social Gaming Leadership Alliance (SGLA), which is made up of social games operators, expressed “strong disappointment” in Assemblyperson Clinton Calabrese’s bill becoming law via a statement released Friday.

“Lawmakers in New Jersey have completely ignored their own constituents and enacted a ban that voters oppose,” said SGLA Executive Director and former U.S. congressman Jeff Duncan. “This law is a textbook example of government overreach that strips away entertainment choices from adults who should be free to make decisions about their own entertainment.” 

Calabrese’s long, strange legislative trip

Earlier in the legislative calendar year, Calabrese submitted legislation proposing to regulate online sweepstakes casino similar to how New Jersey regulates online casino gaming. Calabrese did not submit A5447 that called for a ban until March and then withdrew his previous regulation in April. The anti-sweeps bill gained support while winding its way through assembly committees, most notably from the attorney general’s office and the Sports Betting Alliance, which includes several major sportsbooks.

“New Jersey lawmakers have chosen to eliminate jobs, destroy innovation, and take away games that adults play responsibly and enjoy,” Duncan said. “This isn’t about consumer protection — it’s about using political influence to help established gambling interests eliminate perceived competition even though our products are fundamentally different.

“Online social games use the same promotional structures as countless American businesses, yet New Jersey has decided to prohibit digital game providers from using well-established marketing tools while protecting legacy casino operators.” 

Internet casino gaming is the biggest monthly source of gaming revenue for the state, with consistent double-digit percentage growth year-over-year as well as the rise in the tax rate to 19.75% that took effect July 1. Operator revenue reached a record $247.5 million last month, generating $48.9 million in tax receipts.

No more proxy betting, either

A5447 also contains a clause making proxy betting illegal in New Jersey. It deals more with mobile sports betting than online casino gaming. The statute defines proxy betting as risking “property with a value of $1,000 or more, having agreed to pay 10 percent or more of the proceeds of the gambling activity to another.”

Both parties to a wager — the person who “engages in proxy betting” and the person “who conspires to engage in proxy betting” — would be guilty of a disorderly persons offense if convicted.

Checking the sweeps scorecard

In addition to the four states where anti-sweeps bills have been signed into law, New York legislators passed similar legislation June 18. Gov. Kathy Hochul has yet to sign state Sen. Joseph Addabbo’s bill into law.

Louisiana lawmakers passed an anti-sweeps bill in unanimous fashion, but Gov. Jeff Landry vetoed the measure, citing confidence in the state’s gaming board to combat illegal online gaming. State Attorney General Liz Murrill declared online sweeps illegal via written opinion in July.