New York AG Serves Cease And Desists To 26 Sweepstakes Casinos

The New York Office of the Attorney General (OAG) sent cease-and-desist letters to 26 online sweepstakes casinos and sportsbooks last Friday. 

The announcement, published by Atty. Gen. Leticia James, further demonstrates the Empire State’s commitment to shutting down sweepstakes casinos. A pair of bills on the matter have reached the Assembly and Senate floors.

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

OAG: Sweepstakes violate state law

The OAG and the New York State Gaming Commission worked together to identify 26 sweepstakes casinos offering slots, table games and sports betting. Sweepstakes casinos allow users to bet using virtual coins, redeemable for cash and prizes, rather than wagering money directly. 

New York state laws prohibit online gambling that involves risking items of value. James stated that virtual coins still carry value, and the OAG deemed sweepstakes casinos illegal. 

The statement further stated that the unregulated nature of sweepstakes casinos poses extra risk. Regulatory oversight ensures online casinos provide a product with verified return-to-player percentages and confirm they are financially solvent via audits, thus ensuring player funds are safe and secure. 

VGW one step ahead

Sweepstakes operator VGW, the parent company of Chumba Casino, LuckyLand Slots and Global Poker, announced its plans to exit New York in late May. VGW told customers they could purchase Sweepstakes Coins through June 2 and must redeem all coins by Aug. 1.

The announcement was a precautionary response to bills banning sweepstakes casinos reaching the Assembly and Senate floors, with a VGW representative expressing the company’s wishes to cooperate within all legal parameters. 

VGW has not announced a change to its plans since receiving the C&D. It will continue to allow users access until Aug. 1, but a recent post on Reddit from a Global Poker customer in New York added additional context regarding dates.

  • Users cannot collect Sweeps Coins through login bonuses, competitions or promotional bonuses as of June 2. Promotional Play remains available for users to play with any remaining Sweeps Coins.
  • Users will no longer be allowed to play any Sweeps Coins on July 2.
  • Users will no longer be able to redeem any Sweeps Coins for prizes on Aug. 1.

Support from lawmakers, Gaming Commission Chairman

Sen. Joseph Addabbo, a key factor in New York sports betting and who has led all efforts to legalize online casinos, praised James for sharing his concerns about sweepstakes casinos obtaining personal information and offering unenforceable, unregulated gambling activities.

“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,” said Addabbo. “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.”

Chair of the Assembly’s Standing Committee on Racing and Wagering, Carrie Woerner, also expressed her concerns: “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.”

Gaming Commission Chairman Bryan O’Dwyer added, “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.”

SPGA claims “mischaracterization”

The Social and Promotional Gaming Association, which serves as a “clear and cohesive voice for the social sweepstakes industry,” responded to New York’s actions:

“The Social and Promotional Games Association (SPGA) is disappointed by the New York Attorney General Letitia James’ mischaracterization of legal sweepstakes platforms as ‘illegal’ and ‘dangerous.’ Our members operate within well-established legal frameworks, pay appropriate taxes, and adhere to a strict code of conduct that includes consumer protections and responsible gaming practices.

“Sweepstakes promotions are not gambling under federal law and are legally permitted in the overwhelming majority of U.S. states, including New York. Despite multiple attempts to engage directly with New York lawmakers and regulators, our outreach has gone ignored. Instead of working collaboratively to establish clear, modern rules for platforms that offer free-to-play games and do not require a purchase to win, the state has opted for overreach.”

The SPGA was formed last year and consists of 11 operators. VGW is not a part of the association, having instead started its own five-operator union last month, the Social Gaming Leadership Alliance.

New York ousts many household names

The OAG’s complete list includes several of the largest sweepstake casino operators:

  • Chanced
  • Chumba
  • DingDingDing
  • Fliff
  • Fortune Coins
  • Fortune Wheelz
  • Funrize
  • FunzCity
  • Global Poker
  • Golden Hearts Games
  • High 5 Casino
  • Jackpota
  • Luckyland
  • McLuck
  • Mega Bonanza
  • NoLimitCoins
  • Play Fame
  • RealPrize
  • Sidepot
  • SpinBlitz
  • Sportzino
  • SweepSlots
  • Sweeptastic
  • TaoFortune
  • Yay Casino
  • Zula Casino
Post
Hill Kerby has been involved in the gaming industry for more than 5 years. That started with one of his intense passions: poker (and online poker). However, since then, he has also developed a love for all verticals within online gaming, and he now writes about sports betting, icasinos, social casinos, horse betting, and ilottery in addition to his poker coverage. Hill has a background in psychology, which gives him an ability to offer rare insights and analysis in his writing. Hill is a proponent of safe, legal betting and is grateful to be able to contribute to growing the industry.

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