New Jersey officially joined Connecticut, Montana and Nevada as states with a sweepstakes casino ban.
Gov. Phil Murphy signed AB 5447 into law last week. The new law bans sweepstakes casino operators from doing business in the Garden State.
Sweeps casinos have faced mounting criticism recently, with several states legalizing a ban over the last few months. The New Jersey law is marketed as a method to protect the state’s lucrative online casino industry.
Initially, legislators wanted to integrate sweepstakes operators into the overarching legal landscape. However, that changed as lawmakers’ opinions shifted more towards a complete ban.
“We will not allow bad actors to exploit legal loopholes at the expense of consumers,” Sen. John Burzichelli told one outlet. “This bill will ensure that our laws are clear, our penalties are stronger, and that we have the tools necessary to shut down illegal sweepstakes gambling operations before they can cause further harm.”
Industry Responds
Critics of the sweeps industry argue operators skirt traditional online gambling regulations. On the other hand, operators believe regulators should view the model just like mobile gambling options that users can play for free.
In the sweepstakes model, players buy one set of coins or currency. Additionally, the operator provides a second set of coins or currency that is redeemable for cash. Thus, it’s possible for players to play the games for free.
The Social Gaming Leadership Alliance condemned the New Jersey law and said the ban “defies public opinion.”
“Lawmakers in New Jersey have completely ignored their own constituents and enacted a ban that voters oppose,” SGLA executive director and former congressman Jeff Duncan said. “This law is a textbook example of government overreach that strips away entertainment choices from adults who should be free to make decisions about their own entertainment.
Duncan added that legislators pushed the ban to satisfy existing stakeholders who didn’t want competition from sweeps operators.
“New Jersey lawmakers have chosen to eliminate jobs, destroy innovation, and take away games that adults play responsibly and enjoy. This isn’t about consumer protection – it’s about using political influence to help established gambling interests eliminate perceived competition even though our products are fundamentally different.”
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