New Jersey assemblyman Clinton Calabrese introduced a new bill this week that could regulate sweepstakes casinos in the Garden State. New Jersey would be the first-ever state to legalize sweepstakes if Bill A5196 is passed.
Sweepstakes casinos are currently an unregulated form of iGaming. Like regulated online casinos, these platforms offer traditional casino games such as slots, table games, and even sports betting, but under a sweepstakes model, meaning players do not have to pay cash to play. This also means online sweepstakes do not pay state gaming taxes and lack mandated consumer protections and safeguards.
With only seven states offering legal online casinos so far, sweepstakes casinos fill the void, so to speak, in the states lacking the thrill of legalized online gaming.
The Social and Promotional Games Association (SPGA) has supported this legislation.
“The SPGA welcomes Assemblyman Calabrese’s bill. The SPGA and its members are advocates for clear regulations that enable transparent, innovative, and responsible social and promotional gaming experiences,” the SPGA said in a statement in response to the proposal for this new bill.
The Social and Promotional Games Association, launched in September, advocates for transparent, innovative, and responsible gaming experiences at social casinos. Recently, the SPGA updated its code of conduct regarding casinos that offer promotional sweepstakes prizes. The new code safeguards players' interests and experiences when playing sweepstakes games.
“The pillars of the SPGA Code of Conduct highlight the technology and processes already in place at most social sweeps operators to ensure that the millions of adults who enjoy these games do so in a safe and reliable environment,” said Camilla Wright of Red Knot Communications, a spokesperson for the SPGA. “The standards of the Code of Conduct go above and beyond the accepted best practices for traditional social casinos.”
New Jersey sweepstakes lawsuit
Sweepstakes casinos have received considerable attention in New Jersey recently. For example, Julian Bargo, a resident of the state, filed a lawsuit in December after losing more than $1,000 to multiple sweepstakes casino platforms, including McLuck, High 5, Wow Vegas, and CrownCoins.
In the lawsuit, major operators like Google and Apple were listed, as well as the app stores these companies operate, under the Racketeer Influenced and Corrupt Organizations Act (RICO). Bargo argued that these platforms supported the existence of illegal gambling platforms. Likewise, he argued that the companies profited from social casino apps published on the app stores.
The plaintiff goes on to say that sweepstakes casinos disguise themselves as social casinos while purposefully misleading regulators and players about the true nature of their procedures.
