Governor Murphy Signs Bill Banning Sweepstakes in New Jersey
Expertise: iGaming, Online casinos
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The bill was enacted after passing in the state legislature on June 30 and lingered on the governor’s desk for weeks.
The sweepstakes legislation features three key components: a ban on sweepstakes wagering, new penalties for violators and enhanced enforcement powers for state regulatory agencies, including the Division of Consumer Affairs and Division of Gaming Enforcement.
Sweepstakes casinos operate using two types of virtual currencies: “gold coins” with no monetary value and “sweeps coins” that can be exchanged for real money, a model that has raised concerns among lawmakers and industry stakeholders.
Critics argue that the dual-currency model is a loophole that allows sweepstakes sites to circumvent laws prohibiting real-money online gambling in many areas.
However, supporters contend that sweepstakes are a long-standing and familiar format used by various non-gaming companies, such as McDonald’s and Publishers Clearing House, to engage with customers. They also claim that players can engage without spending money, as free play options are available.
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The sweepstakes model’s benefits are lost on legislators. New Jersey is the sixth state to pass legislation impacting sweepstakes casino sites this year, joining Montana, Connecticut, Nevada, New York and Louisiana.
However, in New York, the governor has yet to sign the bill after clearing both chambers in June. In Louisiana, Governor Jeff Landry vetoed the ban, arguing that there is no need for the legislation in the state.
California is also considering a ban on sweepstakes, with the tribal-backed bill AB-831, which is making its way through the state legislature.
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