Online sweepstakes casinos and sportsbooks built on dual-currency systems are now banned in New York under Bill S5935A. The law prohibits platforms that let players use one in-game currency for fun while converting another into real cash rewards — a model popular among “social casinos” operating in legal grey zones.
For casual players using these sites to mimic the casino experience without the licensing hurdles, this change puts an abrupt end to those options.
Law Targets Real-Cash Prizes Disguised as Promotions
The legislation focuses on internet-based games that offer the look and feel of real casino or sportsbook play while dodging gambling laws by framing themselves as sweepstakes. If a game includes two currencies and the chance to redeem one for cash, it’s now illegal to run or support in New York.
Violators could face steep fines — up to $100,000 per offense — and licensed gaming entities risk additional penalties. Only games with no cash redemption component are still allowed.
Operators Pull the Plug as Players Get Locked Out Overnight
The ink on the bill was barely dry before operators began shutting off access. Novig and ProphetX notified users they were ceasing operations in New York, echoing a wave of player complaints on social media.
One user summed up the mood online:
“Man, thanks for nothing @GovKathyHochul… terrible news waking up and seeing this.”
The speed of the shutdowns shows how seriously companies took the bill — even without Hochul’s signature, the law would have gone into effect within 30 days.
New York Joins States Cracking Down on Sweepstakes Gambling
With this move, New York aligns with states like New Jersey, California, and Nevada that have already banned similar dual-currency models. Thirteen others have sent cease-and-desist orders, and California’s law, which kicks in January 2026, adds potential jail time to the penalties.
The pressure is mounting nationally as more states move to close the legal loophole sweepstakes platforms have been using.
No More Grey Area as State Eyes Future iGaming Expansion
Attorney General Letitia James had already forced several operators to exit the market earlier this year. With S5935A in place, New York now has the legal firepower to go after any holdouts.
Sen. Joseph Addabbo Jr., the bill’s sponsor, has long argued that sweepstakes casinos operate without the same oversight as legal sports betting or iGaming.
“The safeguards we build into mobile sports betting don’t exist in most sweepstakes casinos,” he said.
Now that this segment is off the map, the door may open wider for future discussions around regulated online casinos — especially as downstate casino licenses move forward.
