New Jersey says no to sweepstakes casinos: Why now and what’s next?

Reasons behind the ban

According to Stephan Finkel, Director of Legislative Affairs at the New Jersey Attorney General’s Office, sweepstakes casinos exploit outdated gambling laws to operate under the radar. These platforms offer casino-style games without licenses, taxes, or oversight, often converting virtual coins into real-world cash equivalents.

Finkel stressed that any expansion of gambling in New Jersey requires voter approval via referendum, which is a step that sweepstakes casinos bypass entirely.

These businesses are made to look different than what they are. In reality, they’re unauthorized gambling operations designed to slip through legal cracks.

Lawmakers argue that modern gambling platforms have outpaced regulatory frameworks, and now is the time to firmly close those loopholes.

Why stakeholders are sounding the alarm

Industry voices, particularly the Sports Betting Alliance, which includes giants like DraftKings and BetMGM, are rallying behind the bill. 

Their representative, Eric Shuffler, criticized sweepstakes casinos for mimicking the user experience of legal online casinos while skirting all regulatory responsibilities.

Speaking on the mechanics of sweepstakes casinos, Shuffler stated;

These platforms sell virtual currency for entertainment, then reward users with sweepstakes coins that can be redeemed for cash. They face none of the rules on responsible gaming, advertising, or crypto usage that licensed platforms must follow.

One of the most alarming points raised was the ease of access for minors, with little to no safeguards in place to prevent underage participation.

Not all promotions are subject to ban

To avoid unintended consequences, lawmakers included a clear exemption. Promotions that offer free entry or are tied to low-cost purchases, like food or soft drinks under $20, are not subject to the ban.

This distinction aims to protect traditional promotional campaigns, such as McDonald’s Monopoly or Starbucks Rewards, which the Social and Promotional Games Association (SPGA) feared might be unfairly swept up in the bill.

Still, the SPGA has condemned the legislation as “shortsighted,” advocating instead for a regulatory solution.

Similar debates around the US

New Jersey is not alone in its crackdown. States like Connecticut, New York, and Mississippi have introduced or are debating similar laws. While Florida failed to pass its own ban in early May, the momentum is clearly shifting toward tighter control.

As one of the most mature online gambling markets in the U.S., New Jersey’s actions could signal a broader national shift.

Is this the beginning of the end?

Though the bill must still clear further legislative hurdles, it represents a clear message. New Jersey is prioritizing consumer safety and regulatory integrity over legal ambiguity.

As more states consider following suit, one question looms large:

Could this be the beginning of a nationwide crackdown, and the eventual collapse, of the online sweepstakes casino model?