New Jersey bill cracks down on sweepstakes gaming, but there’s a catch
New Jersey is moving forward with legislation aimed at banning certain popular sweepstakes-based gaming models, a step that could reshape a segment of the state’s gaming landscape. Assembly Bill A5447, chiefly sponsored by Assemblyman Clinton Calabrese (D-36), recently cleared the Assembly Tourism, Gaming and the Arts Committee with unanimous approval and now heads to the Assembly Consumer Affairs Committee for further review.
Also read: Louisiana passes bill banning online sweepstakes platforms
Targeting the sweepstakes model
The bill seeks to prohibit what it terms the “sweepstakes model of wagering,” focusing on promotional events or games where participants can win prizes, often through dual-currency systems. defines a prohibited sweepstakes as any “promotional, advertising, or marketing event, contest, or game, whether played online or in-person, in which something of value, such as a prize or prize equivalent, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent,” especially when an entry fee or other payment is required for participation.
Also read: What’s stopping a federal ban on Sweepstakes casinos?
Exceptions and specific prohibitions
While the ban is broad, the legislation includes specific exceptions. Sweepstakes would still be permitted if entry is obtained through the purchase of food or non-alcoholic beverages not exceeding $20 in value. Crucially, for sweepstakes based on the outcomes of sports events or athlete performances, they would only be allowed if the “sole and exclusive method of entry to participate in the sweepstakes is at no cost to all participants.” This provision is designed to prevent companies from allowing users to purchase “sweepstakes coins” or similar virtual currencies to effectively wager on sports.
“Any method of entry that is not free to the participant is ancillary to the purchase of food, non-alcoholic beverages, or other merchandise such as mugs, trinkets, or mementos, not exceeding $20 in value or such other amount to be determined by the Director of the Division of Consumer Affairs in the Department of Law and Public Safety; provided, however, that such other items of merchandise shall not include coins, tokens, or online credits that have no value other than permitting sweepstakes entry or that are able to be exchanged for money or merchandise from the sweepstakes operator or an affiliated company,” the Bill states.
Committee amendments have reportedly worked to refine the definitions of “game” to explicitly include those that mimic or simulate casino-style games or sports wagering, and to broaden the definition of “prize or prize equivalent.“
Also read: FanDuel, BetMGM slam New Jersey’s tax proposal
Stiff penalties for violations
A5447 proposes significant financial penalties for operators found in violation of the ban. A first offense would result in a penalty of $100,000, followed by further offenses collecting a steeper penalty of $250,000. The bill also gives regulators the power to charge an additional $25,000 fine for each time an operator disregards a cease-and-desist order.
The Division of Consumer Affairs shall be charged with regulating and enforcing the provisions of sweepstakes, and the Division of Gaming Enforcement shall have other prohibitions on illegal gambling in the bill.
Legislative turnaround for Assemblyman Calabrese
The advancement of A5447 marks a policy reversal for Assemblyman Calabrese. Earlier in 2025, he had introduced a different bill, A5196, which aimed to regulate rather than ban sweepstakes casinos. That proposal sought to bring these operations under the state’s existing iGaming framework, requiring them to obtain licensure, partner with established casino licensees, pay taxes on gross revenues, and implement consumer protection measures such as age verification.
However, A5196 was withdrawn from consideration in April 2025, followed by the introduction of the current bill A5447, which takes a prohibitive stance.
Also read: New Jersey Bill A5562 wants gambling ads kept away from kids – SigmaPlay
Rationale behind crackdown
The push to ban these sweepstakes models arises from apprehensions raised by some state officials and existing regulated gaming industry stakeholders.
According to critics, such sweepstakes businesses could technically be operating in a state of legal ambiguity, very much akin to legalized online casino games but without being subject to New Jersey’s licensure, tax, and consumer protection regulations. There have also been assertions that such models might circumvent the state’s constitutional provisions requiring voter approval for gambling expansions.
The referral of A5447 to the Assembly Consumer Affairs Committee is the next step in its path through the New Jersey Legislature.
