New Jersey’s solution to the sweeps casino controversy might be to treat those sites as if they were real-money gambling operators, under a proposed law. Social casinos offering promotional credits redeemable for cash or other valuable prizes would be considered internet gaming operators under a new bill filed this week by Assemblyman Clinton Calabrese. The bill would still have to pass in both chambers of the state legislature and receive the signature of Gov. Phil Murphy to become law.
Sweepstakes casinos, often called “sweeps casinos,” have been operating in New Jersey for some time as an unregulated gaming activity. Calabrese’s bill would use existing gaming laws to place the sweepstakes casinos under that framework for regulation.
According to the language of the drafted bill, New Jersey would designate sweepstakes casinos as internet gaming. They would require licensure and an internet gaming permit for operation. The Division of Gaming Enforcement would be tasked to investigate and restrict operation of unauthorized sweepstakes casinos.
In New Jersey, sweeps casinos have filled a need for some online gambling enthusiasts. With these apps, consumers are allowed to play casino-style games without the burden of a cash deposit. That’s because the consumer can get started with slot games on the sweeps casino app simply by creating an account and using free “coins, chips or tokens.” They can also buy tokens with a credit or debit card. The free sweeps coins handed out by sweeps casinos for creating an account or being active on the app can be used to make more “non-cash” wagers. In this manner, sweepstakes casinos skirt the rules of cash betting which is regulated in states like New Jersey.
With sweepstakes casinos in New Jersey, customers can cash in their earned coins or tokens for cash prizes.
What may happen if the Sweepstakes Bill passes in New Jersey
If the bill were to successfully navigate both chambers of the New Jersey state legislature and become law, sweeps casino operators would be faced with a choice. As a regulated gambling activity, sweeps casinos would be required to pay for a license. That may nudge some of those companies out of the market. In some markets, sweepstakes casinos have shown they prefer to exist in an unregulated market. In Texas, for example, sweeps casinos operate in a market where legal casinos are not yet present, and are thriving.
An additional result of the bill passing would be to force sweepstakes casinos to forge partnerships with New Jersey casinos. By state law, any licensed online casino must have a partnership with a land-based casino that deals in real-money gaming. Land-based casinos that play by the regulatory rules tend to look unfavorably at sweepstakes casino companies. So, such partnerships could be unlikely.
Calabrese is a Democrat who represents the District 36 and serves as the Deputy Whip of the State General Assembly.
“Sweepstakes casinos have operated in a regulatory gray area, which has led to significant challenges, including consumer protection concerns, underage gambling, and economic losses for the state,” Calabrese told Gaming Today. “Recognizing these issues, I have introduced this legislation to address the lack of oversight for these platforms.”
The typical path for a bill in that body is for it to be considered at a committee level, move to the General Assembly for a vote. If passed, it would go to the State Senate for a similar process. A bill can be changed by a committee or amendments can be submitted before a vote and passage. The governor has the power to veto or pass any bill that comes to his desk.