SGLA challenges New York’s ban on online sweepstakes casinos

The Social Gaming Leadership Alliance (SGLA) has responded to an enforcement action from New York Attorney General Letitia James, following an announcement from the state’s Office of the Attorney General (OAG) that it’s banning online sweepstakes casinos from operating in New York.

In a statement shared with ReadWrite, the SGLA said the move wrongly portrays social online games that use sweepstakes promotions as illegal gambling.

According to state gaming laws, online platforms aren’t allowed to offer gambling that involves risking anything of value, which includes virtual currencies used by sweepstakes casinos. The OAG also mentioned that it’s working with the New York State Gaming Commission to track down and shut these casinos down.

“These so-called ‘sweepstakes’ games are unscrupulous, unsecure, and unlawful,” said New York State Gaming Commission Chairman Brian O’Dwyer.

New York Assembly bill banning online sweepstakes casinos continues to advance. AB A6745A was referred out of the Ways and Means Committee today by a 35-0 vote and is now before the Rules Committee. Senate version awaits floor vote. Session ends June 12th. https://t.co/LMVFRlVxjA

— Daniel Wallach (@WALLACHLEGAL) June 6, 2025

“I have been very vocal about the need to crack down on these operations, and I am thrilled that Attorney General James has taken this significant step to eradicate the illegal gambling market. We encourage those of age who wish to gamble to do so with legal operators,” he added.

SGLA disagrees with New York Attorney General’s assessment of sweepstakes casinos

However, the SGLA pushed back on the Attorney General’s claims, saying that the digital tokens used on its partner platforms can’t be redeemed for anything of value, traded, or transferred.

According to the SGLA, the tokens are used to improve the gameplay experience and have no cash value. They also stressed that any prizes awarded through legitimate sweepstakes promotions are completely separate from these tokens and aren’t purchased with them.

“We believe there is an opportunity to create a framework that provides appropriate oversight, mandates robust consumer safeguards, and recognizes the legitimate use of sweepstakes promotions.” – Jeff Duncan, SGLA Executive Director

In its response, the SGLA pointed out that its partners take consumer protection seriously and have strong safeguards in place to create a safe and responsible gaming experience. This includes using advanced identity checks and geolocation tools to make sure minors can’t access their platforms. They also follow strict security procedures like anti-money laundering protocols and Know Your Customer rules to protect users.

The SGLA says its partners offer tools to promote responsible gameplay, such as spending limits, self-exclusion options, and access to support resources for players. The alliance added that these platforms also meet the high regulatory standards set by their financial and technology partners, showing a clear commitment to both safety and compliance.

SGLA Executive Director Jeff Duncan said: “While we disagree with the characterization of our members’ lawful sweepstakes operations in today’s enforcement action, we look forward to working with legislators and regulators to develop a comprehensive regulatory structure that protects consumers while preserving innovation.

“We believe there is an opportunity to create a framework that provides appropriate oversight, mandates robust consumer safeguards, and recognizes the legitimate use of sweepstakes promotions.”

He added that the organization was dedicated to working with New York officials to create fair regulations that benefit consumers, the state, and the digital entertainment industry.

New York crackdown

All of this is unfolding as Senator Joseph Addabbo Jr.’s bill, SB5935, continues to make its way through the New York legislature. The bill is focused on banning sweepstakes-style gaming websites. It also follows a larger national conversation, with increasing efforts across the country to crack down on these kinds of platforms.

In response, several sweepstakes casinos have announced they’ll be pulling out of New York next month. The list includes Real Prize, Hello Millions, SportsMillions, PlayFame, SpinBlitz, and Rolling Riches. High 5 Casino already took action earlier, stopping new sign-ups and transactions on March 27.

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