New Jersey Legislator Refiles Bill To Regulate Sweepstakes Operators

New Jersey, one of six states to ban online sweepstakes casino operators during the 2025 legislative calendar year, may reverse that if a lawmaker can convince his peers.

State Sen. Joseph Cryan introduced on Tuesday S1500, which would amend existing law to include sweeps operators under the regulatory umbrella of the New Jersey Division of Gaming Enforcement (DGE), which currently oversees brick-and-mortar casino gaming, internet casino gaming, and sports betting.

Cryan filed similar legislation last year as a companion bill to A5196 filed by Assemblyperson Clinton Calabrese, but Calabrese withdrew his bill and opted to champion legislation supporting a ban of sweeps after receiving input from the Attorney General’s Office, which oversees the DGE, and support from the Sports Betting Alliance.

Gov. Phil Murphy signed A5447 and S4282 into law last August after each bill passed overwhelmingly in its respective chamber.

Key language in the bill

In addition to the insertion of “operators of online casino sweepstakes” as entities that would be subject to licensure, regulation, and taxation, Cryan’s bill provides specific definitions of “free currency,” and would also legalize the dual-currency method that has often been at the crux of arguments on a state-by-state level for the legality of sweeps.

Cryan’s definition of “free currency” is standard in the sense that they are “tokens or coins of a physical virtual nature that are used in a sweepstakes casino to play a game, which cannot be redeemed for cash, prizes, or other things of value on their own, and which may be purchased but has no intrinsic value apart from its use for specified games or in specified actions, or until combined with other forms of currency or promotional gaming credits offered by a sweepstakes casino.”

It is the “or until combined … ” part that defines the first lever of dual currency. After providing the ability for sweepstakes operators to offer “authorized gambling games,” Cryan then provides the second lever of the dual-currency model in which an “online sweepstakes casino may additionally offer tokens, coins, chips, credits, or other forms of currency for purchase or exchange that are directly redeemable for cash, prizes, and other things of value.”

What’s not in the bill

Currently absent from S1500 are fees for license applications and actual licenses as well as a tax rate for revenue generated by online sweeps operators. The lack of a specific tax rate could mean Cryan is willing to keep the current 19.75% rate that applies to adjusted gross revenue generated by mobile sportsbooks and iGaming platforms; Murphy increased that rate from 15% as part of the budget that took effect July 1 for the new fiscal year.

Cryan refiling his bill can be considered a small win for the Social Gaming Leadership Alliance (SGLA), which spent much of last year on the defensive with little success bringing legislators and regulators to the negotiating table. In addition to legislative bans, operators were swamped with cease-and-desist letters in multiple jurisdictions, with some sweeps operators opting to phase out their dual-currency models in states like VGW did in New York ahead of the ban signed last month by Gov. Kathy Hochul.

That conciliatory approach by the SGLA was on display Wednesday in Maine, where operators spoke out against SP 825, which would ban “Social Plus” games in the state. The SGLA presented a proposal there estimating the industry would generate $3 million in annual revenue via player purchases and operator registration fees.

“This proposal would ensure that all operators enforce strict age-verification restrictions to keep people under the age of 21 from participating, protect consumer data and privacy, ensure prizes can be redeemed promptly, provide clear and truthful advertising to adults only, and provide resources to ensure that customers are interacting with Social Plus games responsibly,” SGLA Managing Director Sean Ostrow said.