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Despite sweepstakes casinos being banned, a New Jersey lawmaker introduced a bill to bring them back as a regulated form of gambling.
Senator Joseph P. Cryan introduced Senate Bill 1500 earlier this week, which would designate sweeps as internet gaming. Sweeps operators would require licensure oversight and subjected to taxes in the bill.
Governor Phil Murphy signed the bill to ban sweeps last August to aid New Jersey online casinos.
What the bill says
Assemblyman Clinton Calabrese introduced legislation in January that would legalize sweeps. However, the bill turned into a sweeps ban in March and progressed through the Assembly and Senate on June 30, leading to Murphy’s signature in August.
Cryan sees a way for sweeps to co-exist with iGaming platforms, as long as there are parameters for the operators. Part of SB 1500 reads:
“In order to operate a sweepstakes casino, the enterprise, following licensure, will be required to partner with a casino licensee and to obtain an internet gaming permit.
“Under current law, this is the procedure for authorizing all other internet gaming.”
Cryan also wrote that sweeps operators would be required to uphold the same standards as other legal entities in the state, including:
- Employee background checks
- Must be 21 years or older to use sweeps
- Licensing and permitting fees
- Payment of taxes
Defining sweeps
Sweepstakes casinos have operated in a gray area in New Jersey, until Murphy’s signed Calabrese’s bill last August. Lots of sweeps operators offered casino-like games to customers, which cut into the legal iGaming vertical.
Now that there’s potential for sweeps to be regulated, they’ll be on an even playing field and contributing tax dollars to the state. Cryan defines sweeps as:
“As defined by the bill, an “online sweepstakes casino” means any platform available via an Internet website or mobile application that (1) provides participants with an opportunity to play authorized gambling games or provides an experience equivalent to, or with similar statistical odds of winning as an authorized gambling game, except that the game does not require any initial monetary investment on behalf of the participants to play and instead is played primarily with free currency;
“and (2) awards to participants at random, as a bundle with the purchase of free currency, or upon the completion of certain specified tasks, currency or promotional gaming credits which can be wagered on games and are redeemable for cash, prizes, or other things of value.
An online sweepstakes casino may additionally offer tokens, coins, chips, credits, or other forms of currency for purchase or exchange that are directly redeemable for cash, prizes, or other things of value.”
Sweepstakes casinos make money by selling optional entertainment currency, while legally guaranteeing that gameplay and prizes are available without payment. S1500 accepts this structure but taxes it like real money gambling.
The sweeps ban moved through legislation in three months. We’ll see how quickly this bill moves through the chambers.
