A new piece of legislation in New Jersey would classify and treat sweepstakes casinos and gaming sites as regulated gaming entities.
Assemblyman Clinton Calabrese has introduced A5196, which has been referred to the Assembly, Tourism Gaming and the Arts Committee.
The bill defines sweepstakes casinos as follows:
“’Online sweepstakes casino’ means any platform available via an Internet website or mobile application that (1) provides participants with an opportunity to play authorized gambling games or provides an experience equivalent to, or with similar statistical odds of winning as an authorized gambling game, except that the game does not require any initial monetary investment on behalf of the participants to play and instead is played primarily with free currency; and (2) awards to participants at random, as a bundle with the purchase of free currency, or upon the completion of certain specified tasks, currency or promotional gaming credits which can be wagered on games and are redeemable for cash, prizes, or other things of value. An online sweepstakes casino may additionally offer tokens, coins, chips, credits, or other forms of currency for purchase or exchange that are directly redeemable for cash, prizes, or other things of value.”
The bill would require sites that meet the above definition to apply for a casino service industry enterprise license. Additionally, they would need to conduct a third-party audit to verify financial standing and provie bi-annual reports to the New Jersey Division of Gaming Enforcement.
While the bill specifies sweepstakes sites need to obtain a casino service industry enterprise license, it does not elaborate on the licensing and tax structure for these operators and whether it would mirror the $400,000 up front licensing fee and $250,000 renewal fee levied on regulated online casinos. The current tax rate for online casinos in the state is 15%.
A trade organization representing several sweepstakes operators, the Social and Promotional Games Association (SPGA), commended the bill in a statement to SBC Americas.
“The SPGA welcomes Assemblyman Calabrese’s bill. The SPGA and its members are advocates for clear regulations that enable transparent, innovative, and responsible social and promotional gaming experiences. The bill aligns with our core objective of reinforcing the well-established legality and legitimacy of social sweepstakes games, which millions of American adults enjoy.”
