Addabbo Champions a Bold Move to Close the Sweepstakes Gaming Loophole

Queens, NY (January 21, 2025): While recording a podcast series about gaming in New York State with the political news outlet City and State, Senator Joseph P. Addabbo, Jr., who chairs the NYS Senate Racing, Gaming, and Wagering Committee, addressed an ongoing loophole concerning online sweepstakes casino operators that attract individuals, particularly older teens and young adults.

“One of my main goals as Gaming chair is to make sure that New Yorkers are safeguarded against gambling practices that could potentially lead to more issues without appropriate legislative measures, such as unregulated sweepstakes casino operators,” Addabbo remarked. “A significant number of sweepstakes operators are based offshore, making enforcement limited or unfeasible, and our more vulnerable demographics, including youth and the elderly, are frequently targeted, which is why I aim to tackle this existing loophole,” Addabbo continued. He shared that the sweepstakes operators enable individuals to invest in virtual coins and win additional coins that can be exchanged for cash rewards. “Using money to engage in a game and earn more money constitutes straightforward gambling and ought to be properly regulated,” Addabbo asserted.

Sweepstakes operators attract clients with an opportunity to engage in casino-like games at no cost. These operators utilize platforms that imitate casinos and video games to encourage the purchase of Gold Coins in return for Sweepstakes Coin tokens, allowing players to participate in Sweepstakes for cash rewards and gifts. As Sweeps Coins are never bought outright and lack intrinsic value, their activities remain outside regulatory oversight, hence the loophole.

At present, sweepstakes casinos are permissible in most states, including New York. These platforms allow participants to play slots, table games, and even live dealer games online without charge, with options to buy coins that can be exchanged for cash rewards and more.

Sweepstakes casinos operate using a dual-currency model – Gold Coins and Sweeps Coins – to comply with the law while exploiting an existing loophole. Both types of currency are given away for no cost by a sweepstakes casino, yet Gold Coins can also be bought. Although neither form has cash value, Sweeps Coins can be traded for cash rewards.

A sweepstakes casino account reveals how many Sweepstakes and Gold coins a player has accumulated. The distinction between Sweepstakes casino sites and online casinos is that with Sweepstakes casinos, a player does not directly “deposit” or “withdraw” money through an account. Instead, players can purchase coins if they choose, to later redeem for rewards.

When players engage in Sweepstakes Coins games, they may earn more, and once they collect a necessary minimum quantity of Sweepstakes Coins, these can be exchanged for cash prizes. The steps for converting your winnings into rewards like gift cards or cash may vary by site but generally follow a similar process. Ultimately, players are spending money to buy coins in exchange for a reward.

“To eliminate this loophole, I plan to advocate for the prohibition or integration of Sweepstakes Casinos in the state, similar to existing regulations in Michigan, Idaho, and Washington, and I will promote iGaming as a secure, effective alternative for online casino enthusiasts,” Addabbo elaborated. “By confronting the Sweepstakes Casinos dilemma and permitting a regulated iGaming casino option, we are underscoring our dedication to protecting New Yorkers, addressing gaming addiction, while generating tax revenue that benefits all state residents,” Addabbo explained. “Without an option for safe, regulated online gaming, many individuals risk becoming victims of sweepstakes casinos that attract clients via free play promotions, with the potential for rewards through the purchase of gold coins,” Addabbo added. “I urge my colleagues and the Governor to take measures against unregulated sweepstakes casinos, while re-evaluating the advantages of permitting licensed iGaming operators to offer authorized services in a popular and continually expanding sector,” concluded Addabbo.