Earlier this week, several online sweepstakes platforms shut down operations in New York. But that does not mean those sites will be gone for long in the Empire State.
The Social and Promotional Games Association (SPGA) announced late Wednesday that its members “are adjusting their approach” to the New York market, where lawmakers are considering legislation that would explicitly ban online sweepstakes casinos.
“Innovation in digital entertainment often requires a constructive and informed dialogue with lawmakers and policymakers,” an SPGA spokesperson said in a statement.
“We saw that dynamic with fantasy sports, and we believe the same approach will help shape smart policy around sweepstakes promotions.”
NY pushes forward with sweeps ban bill
In early March, Sen. Joseph Addabbo Jr. introduced S5935, which would prohibit online sweepstakes in New York. The senator noted in the bill that these platforms “evade consumer protection, responsible gaming, and anti-money laundering requirements” in the state.
The Racing, Gaming and Wagering Committee — of which Addabbo is the chair — quickly passed the bill after Addabbo emphasized that online sweeps offering casino-like games represents “a growing issue.”
The senator pointed out actions taken in Connecticut, where the state’s Department of Consumer Protection Gaming Division not only suspended the license of High 5 Games but also pressed over 1,000 criminal charges against the operator.
In the month prior, High 5 announced it would stop offering its products in the six states that feature legal online casinos, including Connecticut.
Online sweepstakes operators close up shop
On the heels of these two events, several sweepstakes operators — including Hello Millions, SportsMillions, PlayFame, SpinBlitz, and Rolling Riches — halted business in New York within the past week. Full account closures are expected by late April.
“We are disappointed to advise that as of April 30, players in New York will no longer have access to our social gaming services,” PlayFame wrote in a message to its customers.
Similarly, Rolling Riches confirmed its exit from the Empire State, citing “regulatory changes” in the state as a factor.
Howard Glaser, the global head of government affairs and legislative counsel at Light & Wonder, posted on LinkedIn that this “simultaneous exit suggests a cease and desist deadline is looming.”
“Several states have previously issued non-public cease and desist orders to give sweeps operators a chance to comply or respond, and that is likely the case in NY,” Glaser wrote. “These operators chose to exit. Likely other operators have received C&D’s from NY and are pressing their case to NY officials before being forced to exit.”
SPGA says sweepstakes gaming is legal in NY
The SPGA, an organization featuring some of the most prominent online sweepstakes casinos, announced late Wednesday that each of its members will determine the “most appropriate path forward based on individual legal guidance and strategic priorities.”
Such a decision, according to the SPGA, shows the industry’s commitment to collaboration and “regulatory clarity” surrounding sweepstakes-based promotional games.
“We know New York officials recognize the need to get this right,” an SPGA spokesperson said, “because any decisions about social sweepstakes could have broader implications — not only for promotions by companies like Starbucks and Marriott, but also for any mobile game where consumers spend money, from Candy Crush and Coin Master to Clash of Clans and Monopoly Go.”
Also citing research done in Michigan by Eilers & Krejcik Gaming, the SPGA suggested that online sweepstakes games do not compete or negatively impact “traditional” real-money online casinos. In addition, social sweepstakes platforms do not require users to make any purchases. In fact, the SPGA said, most players participate for free.
The SPGA circled S5935 as a sign that such games are legal in New York. According to the group, a proposal to ban sweepstakes games would not be necessary if they were already prohibited under state law.
As it consistently does, the SPGA concluded its statement by emphasizing the association’s commitment and willingness to provide more clarity and transparency regarding online sweepstakes gaming as well as the SPGA’s urging to create an open dialogue with state regulators.
