Is New Jersey about to pardon sweepstakes casinos?

The redemption of the "unregulated" model

On January 13, 2026, Senator Joseph P. Cryan (D) introduced Senate Bill S1500. This bill represents a fundamental shift in strategy. Instead of treating sweepstakes casinos as legal outcasts to be hunted with $250,000 fines, S1500 proposes a "regulate and tax" framework that would bring these platforms under the direct supervision of the New Jersey Division of Gaming Enforcement (DGE).

This shift comes less than a year after the state effectively ended dual-currency gaming with the 2025 New Jersey sweepstakes ban, a move that forced dozens of operators to exit the Garden State overnight.

Now, S1500 seeks to officially designate sweepstakes casinos as a form of Internet Gaming, stripping away the "gray market" label that has plagued the industry for years.

The S1500 framework: what changes?

Under the proposed legislation, the days of operating via legal loopholes would be over. To operate in the Garden State, sweepstakes casinos would have to meet the same rigorous standards as real-money casinos, such as BetMGM or FanDuel.

Requirement	Current status (Post-2025 ban)	Proposed S1500 requirement
Legal status	Prohibited (Unlawful)	Fully licensed & legal
Taxation	$0 (State misses out)	19.75% on gross revenue
Partnership	Illegal	Must partner with an AC casino
Age limit	No state-enforced minimum	Strict 21+ requirement
Oversight	Civil penalties	Daily DGE audits

Why the sudden change of heart?

Senator Cryan’s push for regulation over prohibition isn't just about being "pro-gaming." It’s about revenue and protection.

In October 2025 alone, New Jersey’s regulated iGaming market smashed records with $260.3 million in monthly revenue. This surpassed a summer high in July, when online casinos generated $247.3 million in revenue.

However, experts believe millions more are flowing to offshore sites that don't pay a dime in state taxes.

By regulating sweepstakes, the state can:

• Capture the "missing" tax: Applying the 19.75% rate to sweepstakes revenue could net the state tens of millions annually.

• Mandate consumer safety: Operators would be forced to implement New Jersey’s world-class responsible gambling tools and identity verification.

• Protect Atlantic City: By requiring sweepstakes brands to partner with brick-and-mortar casinos, the bill ensures the boardwalk remains the heart of New Jersey gaming.

A lifeline with a catch

For the sweepstakes industry, S1500 is the lifeline they’ve been praying for.

After also being exiled from New York and California in 2025, a "New Jersey Model" of regulation could serve as a blueprint for the rest of the country.

However, a massive question remains: Will the real-money giants allow it?

New Jersey’s online casino market is currently dominated by a handful of massive stakeholders. While the Social Gaming Leadership Alliance (SGLA) is cheering for the bill, the traditional iGaming lobby may see these platforms as a threat to their record-breaking market share.