New York bans sweepstakes casinos with other states set to follow in 2026

Governor Kathy Hochul signed bill S5935A into law last week as New York became the latest state to outlaw online sweepstakes casinos

New York Governor Kathy Hochul (REUTERS/Elizabeth Frantz/File Photo)

Sweepstake casinos are now officially illegal in New York after Governor Kathy Hochul signed a bill to formally outlaw the platforms.

The bill, S5935A, makes it illegal to operate sweepstakes casino platforms within New York, while operators and businesses – from payment processors to geo-location providers – are prohibited from supporting such platforms.

The ban applies to all online sweepstake casinos that operate a dual-currency system, which allows users to exchange game currency for any cash prize, cash award or cash equivalents. Any party found guilty of violating the law faces fines ranging from $10,000 to $100,000 as well as ineligibility for or loss of a gaming license.

The bill became effective once signed, though most operators have left the state already after the legislature passed the bill back in June, while the state’s Attorney General Leticia James announced cease-and-desist actions against 26 operators in June.

The Social Gaming Leadership Alliance (SGLA), a coalition formed to represent social casino game providers and industry leaders, “expressed deep disappointment” over the ban, claiming that it cut off “access to safe, fun digital entertainment” while “eliminating hundreds of millions of dollars in annual economic contributions”.

“Research from leading consulting firm Eilers & Krejcik shows that Social Plus games contributed over $230 million to New York’s economy in 2024 alone.

“Under a modern regulatory framework, they could generate upwards of $80 million in new annual state revenue,” said the SGLA in a statement.

“Instead, the new law removes popular promotional features without offering meaningful alternatives – hurting consumers, businesses and the state’s innovation economy.

“Public opinion is clear: regulate, don’t ban,” it added.

Lawmakers in California, Connecticut, Montana, Nevada and New Jersey also passed similar bans this year, with states including Florida, Indiana and Maine proposing bans of their own going into 2026.

Across the US, regulators have also issued numerous cease-and-desist letters to sweepstakes operators, including in Louisiana, Arizona and Delaware.