NY Attorney General Orders Halt to Sweepstakes Casinos
On June 6, New York Attorney General (AG) Letitia James announced that her office had issued cease and desist letters to 26 online sweepstakes casinos, directing them to halt operations in the state. The action follows a joint investigation by the Office of the Attorney General (OAG) and the New York State Gaming Commission (NYSGC) into platforms that were offering casino-style games and sports betting to New York residents using virtual currency with redeemable value.
LISTEN TO THIS ARTICLE:According to the announcement, these platforms allowed users to play slots, table games, and engage in sports betting using virtual coins. The key issue identified was that these virtual coins could be exchanged for real cash or prizes, placing the platforms in violation of state gambling laws.
Related: New York Senate Approves Bill to Ban Sweepstakes CasinosNew York law prohibits gambling that involves wagering something of value, including digital tokens or coins that are convertible to monetary rewards. However, the operators' free-to-play games are valid.
The AG described online sweepstakes casinos as illegal and harmful to consumers, warning that such platforms have the potential to devastate personal finances. She noted that her office took the enforcement action in partnership with the NYSGC and acknowledged support from lawmakers such as Sen. Joseph Addabbo, who has worked on related legislative measures. James emphasized the importance of protecting residents from illegal gaming operations that function outside the bounds of consumer safety regulations.
NYSGC Chairman Brian O'Dwyer echoed the concerns, stating that sweepstakes games lack security, legitimacy, and legal compliance. He expressed strong support for the Attorney General's enforcement step and reiterated the commission's stance that individuals who choose to gamble should do so through legal and regulated operators. He further called for greater public awareness regarding the risks associated with unlicensed online gambling platforms.
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Assemblywoman Carrie Woerner, Chair of the Assembly's Standing Committee on Racing and Wagering, voiced concern over the ease of access to sweepstakes-style gaming and its potential influence on minors. She stated that these platforms can act as an entry point into problem gambling, especially for teenagers. Woerner commended the AG's office for its action against platforms she believes pose a risk to public welfare.
The cease and desist letters specifically named 26 operators, including prominent platforms such as Chumba Casino, Fortune Coins, Global Poker, High 5 Casino, and Luckyland Slots. Others listed in the order include Chanced, DingDingDing, Fliff, Fortune Wheelz, Funrize, FunzCity, Golden Heart Games, Jackpota, McLuck, Mega Bonanza, No Limit Coins, Play Fame, Real Prize, Sidepot, Spin Blitz, Sportzino, Sweep Slots, Sweeptastic, Tao Fortune, Yay Casino, and Zula Casino.
The letters demand that these platforms halt the sale of their sweepstakes coins immediately. They must also restrict their games to free-to-play models without cash equivalents.
This regulatory crackdown follows prior developments in the sector. In May, Virtual Gaming Worlds (VGW), the parent company of several major sweepstakes platforms, including Chumba Casino, Luckyland Slots, and Global Poker, disclosed plans to shut down operations in New York. The company's withdrawal is scheduled to begin in June and conclude by August.
Although this decision preceded the issuance of the cease and desist letters, it occurred amid increasing legislative pressure, including Senator Addabbo's proposed bill S5935, which seeks to eliminate the legal ambiguity surrounding sweepstakes casinos operating in the state.
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