New Jersey Becomes First US State to Outlaw Sweepstakes Casinos
Governor Phil Murphy has signed new legislation that bans sweepstakes gambling and proxy betting in New Jersey, introducing significant fines and expanded powers for regulators.
Scope of the Ban
Signed into law on 15 August, Assembly Bill 5447 makes it unlawful to operate sweepstakes casinos in the state. The statute defines sweepstakes gambling as a promotional or marketing event that awards prizes through a dual-currency system or a similar mechanism. Narrow exceptions remain for free-entry games and promotions linked to small-value purchases such as food or soft drinks.
The law also prohibits proxy sports betting and introduces offences for using another person’s betting account or wagering with inside information. Proxy wagers of $1,000 or more are now specifically criminalised.
Penalties and Enforcement
Under the new framework, first violations can lead to fines of up to $100,000, with repeat offences carrying penalties as high as $250,000. The legislation grants the Division of Gaming Enforcement and other regulators authority to pursue injunctive relief against unlawful operators.
Rules on event manipulation have also been expanded, covering sports contests and introducing penalties for bribery or attempts to fix games. Unlicensed online gambling platforms – described in the bill as “online gambling resorts” – are likewise targeted.
Industry Response
The Social and Promotional Games Association criticised the measure, warning that it could affect platforms that allow free play and are used responsibly by millions of adults. Other stakeholders raised concerns that the broad definitions of unlawful gambling may push liquidity into unregulated markets.
Ahead of the legislative change, sweepstakes operator VGW confirmed in July that it would withdraw its Chumba Casino and Luckyland Casino products from New Jersey. The company had already pulled back from New York and faced regulatory challenges in Mississippi and Delaware earlier this year.