- New York banned online sweepstakes casinos on Friday after Gov. Kathy Hochul signed a bill that takes effect immediately.
- The ban targets dual-currency platforms that let players exchange virtual coins for real cash prizes.
- More states like Maine, Florida, and Indiana are filing similar bills to crack down on sweepstakes casinos in 2026.
ALBANY — New York officially shut the door on online sweepstakes casinos Friday when Gov. Kathy Hochul signed Senate Bill 5935 into law, making the Empire State the latest jurisdiction to crack down on what lawmakers consider thinly veiled gambling operations.
Any online game that allows players to trade virtual coins for cash prizes using a dual-currency system is prohibited under the law. Although most operators had already left New York months earlier after Attorney General Letitia James sent cease-and-desist letters to 26 platforms back in March, the bill went into force immediately following Hochul's signature.
In June, the state legislature passed the bill with little opposition. Four days later, the Assembly passed it unanimously, 141-0, after the Senate had approved it 57-2. Sweepstakes operators' hopes of a veto were dashed when Hochul eventually signed the bill after sitting on it for months.
This year, sweepstakes are prohibited in New York, California, New Jersey, Connecticut, Montana, and Nevada. The moves are a major setback for a sector that produced an estimated $10.66 billion in sales countrywide in 2024, of which $762 million came from New York.
Dual-Currency Model Under Fire
How these platforms function is at the heart of the dispute. Sweepstakes casinos offer a secondary currency that players can exchange for real money, despite their claims to host free-to-play social games.
State regulators and attorneys general across the country have rejected that distinction, arguing the setup amounts to illegal USA online gambling without proper oversight or consumer protections.
In a statement issued on Monday, the Social Gaming Leadership Alliance, which advocates for sweepstakes operators, criticized Hochul's choice. According to the group, the law shuts down hundreds of millions of dollars' worth of commercial activity and limits business potential. They wanted New York gambling sites to be regulated rather than banned outright, but those efforts went nowhere.
More States Line Up for 2026
There is still much to be done. Last week, anti-sweepstakes legislation was submitted in Maine and Florida, and a bill that would make running such platforms a crime with a maximum 2.5-year jail sentence was filed in Indiana.
Regulatory gray regions, where the business formerly flourished, are quickly disappearing, and as governments continue to push back against unregulated online gaming, 2026 may bring even more limitations.