New York State Senator Joseph Addabbo Wants to Close Sweepstakes Casino Loophole

^{State Sen. Joseph Addabbo has been a longtime advocate for regulated gaming in New York, and isn’t about to let nefarious actors in through a loophole. (Image: Lev Radin / Sipa USA)}

New York State Senator Joseph Addabbo (D-Queens) says that he wants to close loopholes that allow sweepstakes casinos to operate in the state, either by banning the sites or by incorporating them into a regulated online casino environment. 

Addabbo, who chairs the New York State Senate Racing, Gaming, and Wagering Committee, talked about his intentions during a podcast series hosted by City and State, a New York political news organization.

Addabbo: Sweepstakes Casinos Target ‘Youth and Elderly’

Sweepstakes casinos, also known as sweeps casinos, operate in an unregulated space by using a dual currency system. Free money games are offered with what are commonly known as “Gold Coins” – though sites use varying terminology – which players have the option of buying with cash. 

However, the sites also offer “Sweepstakes Coins” that can be exchanged for prizes like gift cards or cash if players accumulate enough of them. Players can receive some of these coins for free, but can also get them as a bonus for purchasing Gold Coins, essentially providing a path to real money gaming on these sites.

“One of my primary objectives as Gaming chair is ensuring New Yorkers are protected from gambling operations that have the potential of becoming more problematic without proper legislative action, such as unregulated sweepstakes casino operators,” Addabbo said. “Many sweepstakes operators are located offshore making enforcement limited or impossible, and our most vulnerable populations, youth and elderly, are most often targeted, which is why I want to act to address this existing loophole.”

Addabbo said that he worries that individuals could begin playing for free, only to be enticed into making purchases and eventually engaging in unregulated gambling.

“To close this loophole, I will work to ban or incorporate Sweepstakes Casinos in the state, akin to current laws in Michigan, Idaho, and Washington, and I will push for iGaming as a safe, effective alternative for online casino enthusiasts,” Addabbo said. “I encourage my colleagues and the Governor to take action against unregulated sweepstakes casinos, while reconsidering the benefits of allowing legal iGaming operators to provide sanctioned services in a popular and ever-growing industry.”

Addabbo made his comments at a time when sweepstakes casinos are under increase scrutiny. Earlier this week, a New Jersey lawmaker proposed a bill to regulate and legalize sweepstakes casinos in the state.

Another Swing at iGaming in New York

Addabbo’s comments come days after he introduced a bill, known as SB2614, that would allow for online casino and lottery games to be offered in New York State. Addabbo’s bill would allow casinos, video lottery terminal (VLT) operators, sports betting operators, and Native American tribes to apply for iGaming licenses, but would exclude companies that have offered unlicensed games in the past.

The bill sets a tax rate of 30.5 percent on gross gaming revenue. It also includes some responsible gambling provisions, including a $2,500 annual limit on credit card funding for individual accounts, and automatic disclosures about problem gambling anytime an account holder surpasses $2,500 in lifetime deposits.

This isn’t the first time that Addabbo has pushed for additional iGaming in New York, a state that currently offers sports betting online. He has introduced similar online casino legislation in multiple legislative sessions, including last year, and also pushed for New York Governor Kathy Hochul to include iGaming in her budget as a new revenue source for the state.