New Jersey has outlawed sweepstakes casinos after Gov. Phil Murphy signed Assembly Bill A5447 into law on Aug. 3. The measure bars sweepstakes-style gambling where players must pay or provide something of value to enter, and it gives state regulators broad authority to police the market.
The bill cleared the General Assembly by a 69-10 vote on June 30 and passed the Senate 34-5 on July 27. Under the law, sweepstakes are treated as unlawful gambling when participation requires payment or an entry fee, including models built around dual currencies such as Gold Coins and Sweepstakes Coins.
The statute defines sweepstakes broadly as promotional, advertising or marketing events, contests or games, online or in person, in which a prize or prize equivalent is awarded through a dual-currency system or similar arrangement. It also expands the definition of a game to include those that mimic or simulate casino-style games or sports wagering, and broadens prize or prize equivalent to cover cash, merchandise, redeemable tokens, virtual facsimiles and credits.
There is a narrow exception for sweepstakes that offer a free method of entry and satisfy a set of conditions. Any paid route must be ancillary to the purchase of food, non-alcoholic beverages or merchandise worth no more than $20, and the law bars entries whose only value is to enable sweepstakes play or to be exchanged for cash or merchandise from the operator or an affiliate.
The law also requires disclosures on sweepstakes forms, websites and apps, including the rules, the odds of winning each prize unless unlimited entries are allowed, and the nature and number of prizes. It says the odds must be identical whether a participant enters by paying or by entering for free, and it treats the value of cash or merchandise prizes as income for New Jersey tax purposes.
A person under 18 may not claim a prize worth more than $1,000 without parental or guardian consent. The law further authorises the Division of Consumer Affairs to adopt rules to carry it out.
Enforcement is extensive. The Division of Consumer Affairs and the Division of Gaming Enforcement can investigate violations, seek subpoenas and injunctive relief, and pursue cease-and-desist orders. A violation can bring a civil penalty of up to $100,000 for a first offence and up to $250,000 for a second and each later offence, with each day of continued operation counted as a separate offence.
Money collected beyond the division’s costs goes into the General Fund for problem-gambling prevention, education and treatment programs. The law also says violating a cease-and-desist order can trigger additional civil penalties of up to $25,000 for each violation.
The measure drew opposition before enactment. Eleven major sweepstakes operators formed a coalition through the Social and Promotional Games Association, now the Social Gaming Leadership Alliance, and argued that the bill was a broad, ill-considered ban rushed through the legislature to satisfy established casino interests. They said it misrepresented the industry, ignored economic data and threatened technical innovation.
The ban lands in a state with a long gambling history. Voters approved casino gaming in Atlantic City in 1976, making New Jersey the second U.S. state to legalise commercial casinos, and in 2013 it became the second state to permit online casinos, helping build one of the nation’s largest gaming markets by gross revenue.
Venable said regulators, legislatures and private plaintiffs have increasingly examined whether dual-currency models are lawful promotions or unlicensed gambling, and noted new measures in Indiana, Maine, Oklahoma and Iowa during the 2026 legislative cycle.
