New York Fully Bans Dual-Currency Online Sweepstakes

The on-going battle with sweepstakes gaming is not going down. A growing number of US states have taken a negative stance on internet-based sweepstakes gaming, and the latest one to firmly put a stop to sweepstakes gaming is New York.

State Targets Cash-Convertible Sweepstakes Models

New York has made a decisive move against online sweepstakes casinos and sportsbooks by enacting S5935A, a measure banning all platforms that use dual-currency mechanics or offer cash-redeemable rewards.

The legislation is not surprising for industry experts. In fact, it’s just an official confirmation of the existing enforcement activity, and it creates a clearer structure for disallowing internet-based sweepstakes games that imitate casino gaming formats.

With this new measure, regulators now have more authority to act against individuals or businesses that earn profits from these products. The potential penalties could be huge, going from $10,000 to $100,000 per case. And if the companies in question are in the process of obtaining licenses for gaming, they could face even more regulatory consequences.

According to the statute, games that are prohibited are all online contests and promotions providing cash or cash-equivalent prizes. It doesn’t matter if they are accessible via smartphones or desktops, all platforms and devices are covered.

We must note that sweepstakes that do not offer cash-redeemable rewards remain outside the scope of the new law.

Enforcement Power Expands as Other States Pursue Similar Measures

New York joins a list of US jurisdictions that already banned sweepstakes, including New Jersey, California, Connecticut, Montana and Nevada.

All these states have taken similar action against dual-currency sweepstakes models in the previous months. California’s own ban, which is set to take effect on January 1, 2026, goes a step further by adding penalties such as fines and possible incarceration.

And that’s not all. So far, 13 states have already issued cease-and-desist orders to various operators, while several other states are currently exploring potential options for new legislation.

The NY ban is a result of several steps that were taken earlier in the year,

In June, Attorney General Letitia James confirmed that 26 operators stopped sweepstakes-style casino offerings after receiving cease-and-desist issues.

With S5935A now in place, the state has gotten even more direct prosecutorial tools, which will give them even stronger monitoring capacities, as the issue spreads across the entire industry.

Senator Joseph Addabbo Jr., who is sponsoring the bill, has been bringing into focus the lack of safety measures in sweepstakes gaming, often comparing them to regulated betting frameworks. And so it’s high time they are either banned or regulated as classic casino gaming.

By banning imitations of casino products that are linked to cash-redeemable digital currency, New York drew a sharp line between unregulated sweepstakes gaming and any future path toward authorised online casino gaming. Stay tuned for more info regarding sweepstakes and US gaming.