In a significant legislative move, the New York Senate Racing, Gaming, and Wagering Committee has taken decisive action by advancing a bill aimed at banning online sweepstakes casinos. Chaired by Senator Joseph Addabbo, the committee moved the SB 5935 bill out of committee, signaling a robust stance against unregulated online gaming activities that resemble casino games.

During a concise session on Tuesday, the committee, under the leadership of Senator Addabbo, who is known for his proactive stance on legalizing online casino gaming, advanced the bill. Senator Addabbo highlighted the concerning growth of online sweepstakes casinos that operate similarly to traditional casino games but without regulatory oversight. He stressed the urgency of addressing these unregulated entities that are currently operational in various states, including Connecticut, which has already taken legal actions against such operators.

Senator Addabbo’s concerns were echoed by his colleagues. Ranking Member Senator James Tedisco expressed worries about the exposure of youth to gambling temptations, advocating for the legislative measure as a means to shield them. Similarly, Senator Pamela Helming supported the intent behind the bill but chose to vote AWR (Aye Without Recommendation) after considering concerns raised by her constituents.

Highlighting a Case of Regulatory Action

The discussion also brought to light recent regulatory actions, such as those by the Connecticut Department of Consumer Protection against High 5 Games. The department has accused the company of misleading consumers about the legality of their platform, resulting in the suspension of their license and pressing criminal charges against their online casino operations. This serves as a stark reminder of the potential legal repercussions for entities that mislead consumers in states with stringent online gaming laws.

Senator Addabbo’s proposed legislation seeks not only to outlaw these sweepstakes casinos but also to extend the prohibition to various associated entities such as game suppliers, payment processors, and geolocation providers. This bill characterizes sweepstakes that involve any potential exchange for cash or equivalents under a dual-currency system as illegal, proposing hefty fines and licensing ramifications for those in violation.

Industry Backlash and Legislative Challenges

However, the bill has not been without its critics. The Social and Promotional Games Association (SPGA) has vehemently opposed what it views as legislative overreach. The association has criticized the hurried nature of the bill’s progression through the committee and warned of the economic and legal repercussions that could arise from such sweeping regulations.

As the bill progresses to the full Senate, it encapsulates a critical moment for New York’s approach to online gaming regulation. With proponents advocating for stringent measures to protect consumers and prevent unregulated gambling, and opponents cautioning against potential economic harm, the legislative journey of SB 5935 will be closely watched by various stakeholders in the gaming industry.