New York has enacted a prohibition on “online sweepstakes games” that simulate casino-style play and use dual-currency systems that allow players to exchange currency for any cash or cash-equivalent prize. The law prohibits operating, conducting, or promoting online sweepstakes games or supporting the operation of such in New York, and authorizes robust enforcement by the New York State Gaming Commission, the attorney general, and state police. The law takes effect immediately. The prohibition does not affect traditional commercial sweepstakes. Rather, the statute targets platforms that present casino-style games, including slot machines, video poker, table games, lottery games, bingo, or sports wagering through a “dual-currency system” of payment allowing players to exchange currency for cash or cash equivalents, including where such credits are made with “no purchase necessary.”

New York defines an “online sweepstakes game” as any game, contest, or promotion that is available on the Internet or accessible through a phone, computer terminal, or similar device that uses a dual-currency system of payment through which a player can exchange currency for any cash prize, cash award, cash equivalent, or a chance to win such prizes. The Gaming Commission determines what constitutes a dual-currency system under the statute. In practical terms, the familiar gold-coin/sweeps-credit model – selling nonredeemable “play” coins while distributing cash‑redeemable “sweepstakes credits” via purchase bundles or a free alternative method of entry (AMOE) – falls squarely within the prohibition when paired with casino-like games of chance.

The law applies broadly to operators and to those who “support the operation, conduct or promotion” of online sweepstakes games. Thus, covered parties include any applicant, licensed entity, gaming and key employee, individual investor or investment firm, board member, or any other person or entity who operates, conducts, or promotes online sweepstakes games within the state of New York.

Violations are subject to monetary penalties of not less than $10,000 and up to $100,000 per violation, with potential loss of existing gaming licenses and ineligibility for future licenses. Fines are collected by the Gaming Commission and directed to the commercial gaming revenue fund for problem-gambling education and treatment. The Gaming Commission, attorney general, and state police have authority to investigate, issue subpoenas and cease-and-desist letters, and hold hearings to ensure compliance. Given the New York Attorney General’s June 2025 cease‑and‑desist campaign against dual‑currency sweepstakes casinos, stakeholders should anticipate coordinated civil enforcement and swift remedial demands.

Why this matters

The statute draws a line between traditional promotional sweepstakes and “sweepstakes casino” products. A conventional sweepstakes that promotes a bona fide product or service, runs for a limited period, transparently discloses material terms, and does not simulate casino gaming with cash‑redeemable credits remains permissible under New York law (subject to existing registration and bonding rules for higher‑value promotions). By contrast, products that simulate casino games and enable cash-out, regardless of “no purchase necessary” pathways, are now unlawful to operate in New York. Companies that design, administer, or publicize consumer sweepstakes should review promotional materials, game content, virtual currency features, and redemption capabilities to ensure they do not cross into the statute’s “online sweepstakes game” definition. App stores, distribution platforms, payment processors, and media affiliates also face exposure if they knowingly facilitate prohibited offerings. New York’s action follows a clear national trend in 2025 to curtail dual‑currency sweepstakes casinos that mimic unlicensed online gambling. California’s AB 831 expressly bans online sweepstakes casinos statewide. Connecticut amended its law to prohibit sweepstakes or promotional drawings that use simulated gambling devices or facilitate online casino gaming or sports wagering without licensure, with Unfair, Deceptive, or Abusive Acts or Practices (UDAP) consequences. Montana expanded its prohibition on Internet gambling to capture online casinos “by whatever name known,” broad enough to encompass dual‑currency models. New Jersey enacted a framework that treats dual‑currency sweepstakes as unlawful gambling when tied to payment, while prescribing narrow safe harbors for traditional promotions. Regulators across Arizona, Michigan, Maryland, Mississippi, West Virginia, Delaware, and New York have issued cease‑and‑desist letters and subpoenas aimed at sweepstakes casinos, often demanding immediate geoblocking and threatening civil and criminal referrals. Private litigation is accelerating in multiple jurisdictions against operators, influencers, and, in some cases, facilitators and app platforms.

Although a traditional sweepstakes is not the target of this new statute or the statutes in other states that have prohibited sweepstakes casinos, the current trend could affect traditional promotion marketers to the extent that they use loyalty points, in‑app tokens, or other online currencies. When those features look or function like dual‑currency systems, especially when paired with casino‑style mechanics or cash‑out paths, they risk being treated as prohibited sweepstakes casinos in New York and elsewhere. Proper structuring remains paramount.