New Jersey Gov. Phil Murphy signed Assembly Bill A5447 into law on Friday (15 August), enacting an immediate ban on sweepstakes casinos in the state.
The bill, approved by lawmakers in June, defines and outlaws the “sweepstakes model of wagering,” which has allowed companies to offer casino-style games to customers by tying gameplay to promotional entries or virtual currency purchases.
Its approval by Gov. Murphy marks a significant development for New Jersey’s online gaming industry, as it closes the market to sweepstakes-based gaming operators entirely.
Earlier this summer, Murphy also signed legislation raising online casino and sports betting tax rates to 19.75%, down from an initially suggested hike to 25%.
With the new law now signed, New Jersey becomes the latest state to formally ban sweepstakes casinos. Governors in Connecticut, Montana, and Nevada have already signed similar bills.
By contrast, Louisiana’s governor vetoed a comparable measure, arguing that regulators already had the authority to act against unlicensed gambling operations.
Louisiana’s Gaming Control Board has since issued over 40 cease-and-desist letters targeting a mix of sweepstakes operators and offshore sportsbooks. Mississippi has also used cease-and-desist orders rather than legislative bans.
Discussions to pass similar bills in Arkansas, Florida, and Maryland proved unsuccessful, while California continues to consider its own proposal.
SGLA unhappy with ‘draconian’ law
Not all stakeholders welcomed New Jersey’s decision. The Social Gaming Leadership Alliance (SGLA), representing social gaming operators, issued a strong rebuke.
In a statement, SGLA executive director Jeff Duncan, a former Congressman, argued that in approving the ban, lawmakers had ignored public opinion and curtailed consumer choice.
He framed the “draconian” law as a government overreach designed to protect established gambling interests rather than consumers.
Duncan contended that social gaming products differ fundamentally from traditional gambling and rely on promotional tools that many industries use to engage customers.
The SGLA highlighted concerns over provisions such as $20 purchase caps and prohibitions on digital prizes, arguing that these restrictions not only undermine digital entertainment but also threaten innovation and economic growth.
The organisation maintains that the law threatens jobs, investment, and legitimate business practices.
According to the group, policymakers in other states should now aim to eschew what it sees as New Jersey’s “flawed” paradigm and instead pursue regulatory approaches that balance consumer protection with economic growth.
