New York’s patience for sweepstakes casinos and sportsbooks may have run out – and the same might be said for pre-game betting segments that are a little too parlay-happy.
That lack of patience was made clear on Monday during a meeting of the New York State Gaming Commission (NYSGC).
Chairman Brian O’Dwyer said he has “noticed an uptick in activity that is generally referred to as social gaming,” wherein people are encouraged to gamble online using a “non-value virtual currency.”
Not OK with pay to play
However, O’Dwyer said he’d been told that several operators could be skirting or even violating the state’s gambling laws, as when users run out of “virtual chips,” they are prodded to buy more to keep playing. Some operators, he added, have a “secondary market” where the virtual currency can be traded for something of value.
“I have serious concerns that these operators … are doing business inside our state and running afoul of New York's penal restrictions on unlawful gambling,” O’Dwyer said. “I have discussed this with our staff. They have made several referrals to law enforcement, and they are assisted in case development. I can assure my fellow commissioners and the public that if … this activity continues and is found to be in violation of New York state's gaming law, that we will do everything possible to assure that that law is protected and respected.”
O’Dwyer’s comments suggest New York regulators and law enforcement could take action against sweeps operators, something the legal sports betting industry has asked for and that other states have already done. For example, Maryland's gaming regulator recently sent cease-and-desist letters to 11 operators, including five sweepstakes casinos and one "social" sportsbook.
New York would add serious heft to the effort to curb sweepstakes gambling. The state is the largest competitive market for legal online sports betting sites in the U.S., and lawmakers there continue to ponder the potential legalization of online casino gambling as well, two businesses with which sweeps compete.
O’Dwyer said he would update commissioners at their next meeting on what the regulator and law enforcement will do.
“It is serious, and it's getting far more serious,” the chairman said. “And I think many of you have seen those ads.”
"The regulators, and our licensees, the operators, share a common goal in wanting to be in full compliance with applicable laws and regulations. Having a common understanding of what is subject to the law and regulations is paramount to achieving this compliance."
— NYS Gaming Commission (@NYSGamingComm) January 27, 2025
O’Dwyer had other grievances he voiced on Monday, including having spent “far too much time” over the past few weeks listening to sports betting ads instead of sporting events themselves.
Moreover, in late December, O’Dwyer said he had a video call with an operator licensed to offer online New York sports betting.
The call touched on the "challenges" of meeting the commission's requirements for advertising, including that each ad "clearly and conspicuously" provides contact information for a problem gambling hotline. Gov. Kathy Hochul signed legislation into law last year making that requirement clear.
Spider-Man meets problem gambling
O’Dwyer noted the law defines advertising “very broadly,” and captures “promotional activities” of the state’s licensees. His remarks suggest the regulator could ultimately pursue additional rules for those operators.
“Anybody who has been watching sporting events these days could say that there is a blurring between the pre-event discussions and what is sports betting promotion,” O’Dwyer said. “There's also a blurring of what can be considered news, information, and what is, in practicality, a call for a wager. Either way, we as regulators, our licensees, the operators, everybody in the industry … should be in full compliance with applicable laws and regulations, and we should be looking, frankly, as the commission, to see whether those regulations that we have are adequate to address the problem, or whether new regulations are needed.”
The chairman said he’d asked commission staff to put together a meeting of “all stakeholders” in the first quarter of 2025 to see if full compliance with the law can be achieved and whether the commission should be doing more to address problem gambling.
O’Dwyer said he would chair the meeting and would report back to the commission at its next meeting with the date and time.
“Let me say parenthetically, I don't think any of us were prepared for the explosion of internet sports gambling,” O’Dwyer said during Monday’s meeting. “And the state has gotten enormous revenue out of it, and an awful lot of good has come of that. However, I think all of us here have to be aware that along with that great benefit comes great responsibility, and the responsibility we have is to ensure and not to be blind to the possibility that people will ... abuse the gambling, and that they will engage in problem gambling, and people will be hurt, unless we take strong actions to try and at least ameliorate some of those negative consequences.”
