New York Attorney General Threatens Sweepstakes Casinos Out of the State

As a bill banning sweepstakes casinos is being considered in the state legislature, the New York State Attorney General has fired a shot across the bow by issuing cease-and-desist orders to several of those operators.

The website for Attorney General Letitia James claims that her office has "stopped online sweepstakes casinos operating in New York." That's a reference to 26 cease-and-desist letters to 26 alleged sweepstakes casinos and illegal gaming operators that offer "players slots, table games, and sports betting using virtual coins that could be exchanged for cash and prizes."

The New York legislature has a bill in committee in the State Assembly (Bill A6745A) that would prohibit online sweepstakes games and revenue in this state. That bill is gaining momentum, and hasn't faced any formal opposition, but is still a few steps away from facing a vote on the floor.

Bill A6745A is supported by State Senator Joseph Addabboo, a lawmaker who has been instrumental in expanding and regulating gaming in the state. James says her issuance of orders to sweepstakes operators was accomplished in coordination with Sen. Addabbo.

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

James' claim that her office has eradicated the sweepstakes casinos is difficult to confirm. As of Friday, June 6, there were still a handful of sweepstakes games and casino apps available in New York. But her office claims these gaming operators that were allegedly offering casino-style games have bene expelled from the state:

• Chanced
• Chumba
• DingDingDing
• Fliff
• Fortune Coins
• Fortune Wheelz
• Funrize
• FunzCity
• Global Poker
• Golden Hearts Games
• High 5 Casino
• Jackpota
• Luckyland
• McLuck
• Mega Bonanza
• NoLimitCoins
• PlayFame
• RealPrize
• Sidepot
• SpinBlitz
• Sportzino
• SweepSlots
• Sweeptastic
• TaoFortune
• Yay Casino
• Zula Casino

“These online sweepstakes games can serve as the on-ramp to problem gambling for teenagers, particularly. I am grateful for the work of Attorney General James and her staff for shutting down 26 of these games,” said Carrie Woerner, an Assemblywoman representing District 113 who introduced A6745A.

The danger sweepstakes casinos may pose to underage citizens is a fear that's been cited in New York and other states considering a ban on these platforms. Last month, Montana became the first state to pass a prohibition on sweepstakes casinos. Louisiana and Connecticut are also close to passing similar bans.

Other concerns over sweepstakes casino apps are the fact that they are not regulated and do not pay tax revenue. New York does not have legal online casino apps, a product just seven states have launched. New York does have a handful of retail casinos and legal online sportsbooks. Estimates predict that legal online casinos could result in excess of $500 million annually in tax revenue for the Empire State.

In order to prohibit sweepstakes casinos in the state, lawmakers will need to amend the NY racing, pari-mutuel wagering and breeding law, which governs gaming here. Not only would A6745A accomplish that, but it would also require the New York state gaming commission and/or the New York state attorney general "to deny a person from commencing or continuing operations" of sweepstakes casino games.

It appears that's what James did with her proactive cease-and-desist action last week.