How Are Sweepstakes Legal In New York?

Published on January 29, 2025, 3:25 pm
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Considering that the US is home to arguably the world’s gambling capital in Las Vegas, the country’s laws concerning the activity are fairly confusing. In some states like Utah and Hawaii, it is covered by a blanket ban. In others, like New Jersey and Nevada, a far more liberal approach has been adopted. Nevertheless, even these two examples have certain restrictions on what is and is not permissible.

It was hoped that after the US Supreme Court’s historic decision in May 2018 to allow sports betting, this could result in a unification of other betting legislation. However, it has not so far proved to be the case. But one city that certainly has its eyes firmly set on loosening up some of its famous restrictions on gambling is New York.

It’s anticipated that by the end of 2025, at least three new licenses will be issued to brick-and-mortar casino operators hoping to get a foothold in the Big Apple, adding entertainment and making NY an even better place to live. Hudson Yards, Queens, and Hell’s Kitchen look to be the most likely locations for the proposed casinos. Until they open, players in the city do have the chance to enjoy some online betting action at one of the many sweepstakes casinos that are perfectly legal to play, for the moment at least. To understand why these are permitted while other online casinos are not, first, it is important to understand the law relating to sweepstakes.

Contests, Lotteries and Sweepstakes

Many lay people are confused about what defines a sweepstake and differentiate it from a contest or a lottery. So, first things first, in a contest, the winner generally has to display a certain level of skill that can be judged, and it is legal to ask for payment to enter.

On the other hand, a lottery involves a winner chosen completely at random from all of the entries received. 

They also have to pay to enter. In sweepstakes, there is no requirement to pay for entry; the winner is generally chosen randomly. There are other restrictions imposed in New York on sweepstakes which include the fact that any prize fund worth $5,000 or more must be registered and bonded with the New York Department of State. The rules must be openly available wherever the sweepstakes is being held as well as on any advertisements that feature it. There must also be a full list of winners available after the prizes have been awarded.

The Sweepstakes Casino

The aspect of the rules that allows many sweepstakes casinos to operate completely legally in New York State is the no-purchase-necessary clause. Unlike traditional online casinos that require players to put down some stake money in order to start playing, there’s no such need in sweepstakes casinos.

Instead, new players are awarded a stash of what are typically known as Gold Coins. These are a virtual currency with no monetary value outside of the sweepstakes casino that issues them. Once obtained they can be used to play the whole range of sweepstakes casino games in 2025 that you might expect, with a special emphasis on slots.

Then, there is a secondary currency that is usually called Sweeps Coins or something similar. These do have a monetary value, which can either be cashed in for actual dollars or exchanged for prizes when they are used to play and win. These include everything from leisure vouchers to branded goods.

In most casinos, Gold Coins can be exchanged for Sweeps Coins, or they may be automatically awarded in exchange for winnings. Because they are not being directly bought and paid for by the player it keeps the casino on the right side of the law. An element that sweepstakes casinos have in common with online casinos is the wagering requirement. This means that before any winnings or prizes can be claimed the player has to bet a set multiple of the Sweeps Coins that have been awarded.

A community about to be closed down?

The fact that sweepstakes casinos are less focused on winning cash than other online casinos also means that they’re more focused on developing communities among players. Chat rooms and leaderboards add to this atmosphere of friendly competition and camaraderie among peers. Despite their popularity and apparent legality, there may be moves afoot to clamp down on sweepstakes casinos in New York.

State Senator and chair of the committee on Racing, Gaming, and Wagering Joseph P. Addabbo, Jr. announced in January that he will push to close the no-purchase loophole and therefore render sweepstakes casinos illegal. To balance this, he has also affirmed that he will be calling for other forms of online gaming to be legalized and regulated.

This might not be such good news for fans of the sweepstakes casino. But it could introduce a whole new era for New Yorkers who have long been calling for legal access to online gambling.

 

Featured image credit: DepositPhotos.com

Jonas Bronck is the pseudonym under which we publish and manage the content and operations of The Bronx Daily.™ | Bronx.com - the largest daily news publication in the borough of "the" Bronx with over 1.5 million annual readers. Publishing under the alias Jonas Bronck is our humble way of paying tribute to the person, whose name lives on in the name of our beloved borough.