NY AG James Halts 26 Sweepstakes Casinos

A Sweeping Crackdown

New York Attorney General Letitia James announced her office, in tandem with the New York State Gaming Commission, had halted operations of 26 online sweepstakes casinos operating illegally in the state. These platforms “offered slots, table games, and sports betting using virtual coins that players could exchange for cash or prizes, violating New York’s anti-gambling laws”.

James sent cease-and-desist letters to the operators, demanding an immediate end to prohibited activities. All 26 platforms complied, stopping the sale of sweepstakes coins in New York. “Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” James said.

The Office of the Attorney General (OAG) identified platforms like Chumba, Luckyland, and High 5 Casino, among others, as running afoul of state law.

New York prohibits gambling that involves risking “something of value,” including virtual coins redeemable for cash, on games of chance. The OAG argued that sweepstakes casinos’ dual-currency systems, where players buy “gold coins” and receive “sweepstakes coins” for betting, constitute gambling, regardless of free coin options.

“Betting cash-redeemable virtual coins is gambling under New York law,” the OAG stated. The office dismissed claims that these platforms are legal promotional sweepstakes, noting that sold coins, which can be cashed out, hold clear value.

The Industry’s Rebuttal

The Social and Promotional Games Association (SPGA), representing sweepstakes operators, blasted James’s actions as misguided. The SPGA issued a statement calling the Attorney General’s portrayal of their platforms as “illegal” and “dangerous” a mischaracterization. “

Our members operate within well-established legal frameworks, pay taxes, and adhere to strict consumer protection codes,” the SPGA said. The group argued that sweepstakes promotions are not gambling under federal law and are permitted in most U.S. states, including New York.

They lamented the state’s “blanket enforcement” without dialogue to separate compliant firms from rogue operators, claiming it stifles innovation and limits consumer choice.

Named Operators

The 26 platforms targeted include Chanced, Chumba, DingDingDing, Fliff, Fortune Coins, Fortune Wheelz, Funrize, FunzCity, Global Poker, Golden Hearts Games, High 5 Casino, Jackpota, Luckyland, McLuck, Mega Bonanza, NoLimitCoins, Play Fame, RealPrize, Sidepot, SpinBlitz, Sportzino, SweepSlots, Sweeptastic, TaoFortune, Yay Casino, and Zula Casino.

Some, like VGW (operator of Chumba, Luckyland, and Global Poker), began phasing out New York operations before the crackdown, citing regulatory pressure. VGW stopped selling sweepstakes coins on June 2 and will end redemptions by August 1. Others, like High 5 Casino, ceased services in March.

Legislative Context

New York’s move aligns with a broader push to curb sweepstakes casinos. Senate Bill S5935, introduced by Senator Joseph Addabbo, and Assembly Bill A6745, backed by Assemblywoman Carrie Woerner, aim to ban dual-currency sweepstakes games, with fines up to $100,000 per violation.

The bills, pending, target not just operators but also banks and payment processors supporting them.