New York Attorney General Letitia James has issued cease-and-desist orders to 26 online sweepstakes casinos amid concerns over a lack of “regulatory oversight” on the sector.
Both the Office of the Attorney General (OAG) and the New York State Gaming Commission (NYSGC) worked in collaboration to shut down the online platforms, all of which hosted slots, table games and sports betting via the use of virtual coins that could then be exchanged for real-world cash or prizes.
State law outlines how any gambling that involves anything of value, in this case virtual coins, is prohibited unless the operator is licensed by the NYSGC.
James’ update noted that given the online sweepstakes were operating without a state licence, players engaging with the operators in question were “at risk”.
Since the cease-and-desist orders were sent, all 26 operators have agreed to stop selling sweepstakes coins in New York.
Of those 26 brands to be handed cease-and-desist orders, VGW-owned Global Poker, Luckyland and Chumba were included, as were High 5 Games and Fliff.
Last month, VGW announced it would pull out of New York, prior to James’ cease-and-desist clampdown being made public.
James welcomed the news and singled out Senator Joseph P Addabbo, a vocal critic of online sweepstakes, for praise in his efforts in thwarting the impact of such operators in the Empire State.
“Online sweepstakes casinos are illegal, dangerous and can seriously ruin people’s finances,” explained James. “I thank the New York State Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.”
Addabbo stressed that sweepstakes casinos only increase the risk of problem gambling, adding: “These so-called sweepstakes casinos not only put individuals at risk of fraud and financial exploitation, but they also create dangerous pathways for gambling addiction, especially among minors.
“This is not about taking away anyone’s livelihood, it’s about protecting New Yorkers and working toward a safer, regulated online gaming environment for age-appropriate individuals.
“I commend Attorney General James and her office for their dedication towards protecting our residents and for recognising the urgent risks posed by these illegal platforms.”
However, the decision has been met with backlash by the Social and Promotional Games Association (SPGA), with the sweepstakes trade body claiming its attempts at dialogue with both lawmakers and regulators in New York have gone ignored.
A statement issued by the SPGA read: “The SPGA is disappointed by the New York Attorney General Letitia James’ mischaracterisation of legal sweepstakes platforms as ‘illegal’ and ‘dangerous’.
“Our members operate within well-established legal frameworks, pay appropriate taxes and adhere to a strict code of conduct that includes consumer protections and responsible gaming practices.
“Sweepstakes promotions are not gambling under federal law and are legally permitted in the overwhelming majority of US states, including New York. Despite multiple attempts to engage directly with New York lawmakers and regulators, our outreach has gone ignored.
“Instead of working collaboratively to establish clear, modern rules for platforms that offer free-to-play games and do not require a purchase to win, the state has opted for overreach.
“It’s disappointing to see a blanket enforcement action taken without meaningful dialogue or effort to distinguish between compliant companies and truly illegal operators. This approach stifles innovation, limits consumer choice and disregards the legal status of sweepstakes promotions.”
The sweepstakes sector has come under increasing scrutiny in recent weeks, with Connecticut the latest jurisdiction to see its lawmakers approve a ban on sweepstakes gaming in the state.
Senate Bill 1235 unanimously passed through the Constitution State’s House of Representatives with a vote of 146-0 and, as a result, now only needs the signature of Governor Ned Lamont to pass it into law.
The week prior, Louisiana passed its own anti-sweepstakes bill in the Senate, after Montana became the first US state to officially pass legislation banning sweepstakes gaming in late May.
The post New York Attorney General orders 26 sweepstakes operators to cease-and-desist first appeared on EGR Intel.
Lawmakers and regulators in the Empire State join forces to thwart online sweepstakes, which have been described as “illegal” and “dangerous” by AG Letitia James
The post New York Attorney General orders 26 sweepstakes operators to cease-and-desist first appeared on EGR Intel.