New Jersey Bans Sweepstake Casinos: Governor Signs AB 5447

On Friday, Aug. 15, 2005, New Jersey Governor Phil Murphy (D) signed legislation that bans online sweepstakes casino and poker sites. Assembly Bill 5447 took effect that same day with enforcement powers granted to the New Jersey Division of Consumer Affairs and Division of Gaming Enforcement.

What Is a Sweepstakes Casino?

“Sweepstakes casino” refers to an operator that uses a dual currency system of play money and a secondary currency, often called Sweeps Coins. Users buy the play money chips and are then given a free gift of the secondary currency. While the play chips can never be redeemed for anything of value, the other currency typically can be exchanged for cash, gift cards, or other prizes.

This sweepstakes loophole has hitherto been used to circumvent traditional anti-gambling laws. Because customers are not buying Sweeps Coins directly but rather only purchasing play money, any wins that they accrue from Sweeps Coins are legally not considered gambling winnings but rather sweepstakes prizes. Or so the theory goes.

This sweepstakes model was debuted first by VGW Holdings with its Chumba Casino, which opened for business in 2012. At that time, it was an innovative concept, but it has since been copied not only by Chumba's sister brands, Global Poker and LuckyLand Slots, but also by many competitors, like High 5 Casino and Stake.us.

Website of Chumba Casino

What Does the New Law Say?

The text of AB 5447 defines sweepstakes as follows:

"Sweepstakes" means a promotional, advertising, or marketing event, contest, or game, whether played online or in person, in which something of value, such as a prize or prize equivalent [emphasis added], is awarded, either directly or indirectly through means such as a dual currency system [emphasis added] of payment that allows a participant to exchange the currency for a prize or prize equivalent.

In the definitions section of the bill, we find out what's considered a prize or prize equivalent:

"Prize or prize equivalent" means (1) cash, a cash equivalent, or merchandise; (2) a token, object, or article, or a virtual facsimile thereof [emphasis added], that can be exchanged, sold, or redeemed, either directly or indirectly through means such as a third-party marketplace, external service, or cash-out function, for cash, a cash equivalent, or merchandise; or (3) any form of credit or promise directly or indirectly contemplating the transfer of cash, a cash equivalent, or merchandise, or of any interest therein.

We've taken the liberty of bolding a few key phrases from the parts of the legislation quoted above. Specifically referencing the dual currency system and virtual facsimiles of chips that can be cashed out makes it clear that online sweepstakes gaming operations, like Global Poker, are definitely included within the scope of the law.

AB 5447 states that conducting a sweepstakes that anyone in New Jersey can participate in by paying something of value for the opportunity to win a prize or prize equivalent is against the law.

Penalties

Violations of the law are subject to civil penalty of up to $100,000 for the first offense and $250,000 for subsequent offenses. For the purposes of this law, each day that a violation continues counts as a separate offense.

In addition to the civil penalties, anyone convicted of breaking this law could be subject to prosecution under the relevant New Jersey statutes pertaining to gambling promotion, maintenance of a gambling resort, and possession of a gambling device.

Exceptions

There is a carveout by which certain sweepstakes that accept payment for entry are legal for residents of New Jersey. They must meet the following conditions:

• It must be possible to participate at no cost
• Any paid-for method of entry must be ancillary to the purchase of food, non-alcoholic drinks, or other merchandise valued at $20 or less provided that such items “shall not include coins, tokens, or online credits that have no value other than permitting sweepstakes entry or that are able to be exchanged for money or merchandise from the sweepstakes operator or an affiliated company”
• The winners of any such sweepstakes cannot be determined by the performance of sports teams or athletes unless the sweepstakes is free to enter for all entrants
• The sweepstakes form must clearly disclose all the rules and the odds of winning all prizes except if the sweepstakes permits an unlimited number of entries, in which case the fact that unlimited entries are permitted and the number of all prizes must be stated
• The value of any prize shall be subject to New Jersey income tax
• Persons under 18 shall be able to claim only prizes of $1,000 and lower unless they have the consent of a parent or guardian
• The odds of winning any prize must be identical whether the entry was purchased or obtained for free

The purpose of this exemption is to not interfere with traditional sweepstakes contests. The intent is to allow, for example, the McDonalds Monopoly sweepstakes game or drawings for free merchandise conducted by local retailers to remain legal.

Other Provisions of AB 5447

Besides making sweepstakes casinos illegal, there are several other aspects of the legislation related to gaming:

• Prohibits making sports bets with inside information or using someone else's account to bet
• Makes proxy betting illegal
• Makes it illegal to “rig” sporting events, including by offering or accepting bribes to fix matches
• Explicitly includes online gambling in the portion of law relating to gambling promotion

Legislative History

AB 5447 was introduced to the New Jersey Assembly on March 17, 2025 by Assemblyman Clinton Calabrese (D). It moved through various committees over the next couple of months, being amended once, before coming up for a floor vote in the Assembly. It passed with a vote of 69 – 10 – 1 on June 30. It then went to the Senate, which passed it on the same day, voting 34 – 5 – 1 in its favor.

The bill then proceeded to the desk of Governor Phil Murphy (D). He had 45 days to sign the bill or veto it before it became law without his signature. He did sign it on the last possible date, Aug. 15. AB 5447 is now the law of the land, and it took effect immediately as specified in the text of the bill.

Phil Murphy, Governor of New Jersey

Reactions

Although AB 5447 passed both houses of the New Jersey Legislature by overwhelming margins, public support for this measure was by no means universal. As expected, sweepstakes operators and the groups that support them were against the legislation.

The Executive Director of the Social Gaming Leadership Alliance Jeff Duncan said:

This law is a textbook example of government overreach that strips away entertainment choices from adults who should be free to make decisions about their own entertainment…New Jersey lawmakers have chosen to eliminate jobs, destroy innovation and take away games that adults play responsibly and enjoy. This isn't about consumer protection – it's about using political influence to help established gambling interests eliminate perceived competition even though our products are fundamentally different.

Many Operators Have Already Left

Quite a few sweepstakes operators read the handwriting on the wall and decided to exit New Jersey even before the bill was signed. This was true of VGW Holdings, which owns the popular Global Poker, Chumba Casino, and LuckyLand Slots brands.

Players at the VGW brands in the Garden State were already prevented from acquiring more Sweeps Coins via login bonuses, purchases, and contests on July 29. They won't be able to play in games using the Sweeps Coins currency starting Aug. 26 although play-for-free Gold Coin games will still be available. On Sept. 24, New Jersey users will be stopped from redeeming any further Sweeps Coins for prizes.

Other social casinos acted with even greater alacrity. Clubs Casino stopped accepting N.J. players on July 2 with LuckySlots.us following suit a couple of days later. In mid-July, Funzpoints and Spree also decided to stop doing business in New Jersey. Other sweepstakes operators have made similar decisions, and more are likely to do so now that AB 5447 has officially become law.

Anti-Sweeps Sentiment Spreading in the United States

Whereas Global Poker, Chumba Casino, and their ilk were largely ignored by the majority of state leaders up until just a few years ago, that has now changed. There's a growing movement to go after these sites and treat them as illegal gambling providers.

Sweepstakes casinos have been included in several rounds of cease-and-desist letters issued by state authorities. For instance, in late 2023, the Michigan Gaming Control Board sent VGW and Stake.us such letters. On March 12, 2025, VGW received a similar letter from the Maryland Lottery and Gaming Control Agency. Louisiana and Mississippi both jumped on the bandwagon on June 17, 2025 with Mississippi citing specifically Chumba Casino and Louisiana targeting VGW Holdings as illegal gambling operators.

New Jersey isn't the first state to successfully pass anti-sweepstakes casino legislation. Montana, Connecticut, and Nevada have passed similar bills this year. New York has also passed an anti-sweeps bill through its Assembly and Senate although the governor has not yet signed it.

Several of the states that have been most active in these kinds of enforcement tactics are those with their own licensed online gambling economies. Though they almost invariably cite consumer protection as their major concern, it's really the protection of state tax revenues that motivates them in our opinion.

Online Gaming Still Available in New Jersey

Even with the departure of most sweepstakes poker and casino sites from New Jersey, you still have alternatives apart from the instate, regulated providers. For example, CoinPoker happily transacts with New Jerseyites, and it will even grant you a 150% up to $2,000 poker bonus when you make your first deposit.

Click the button below if you wish to sign up for Coin Poker right away:

To learn more about this online poker and casino site first, read this detailed Coin Poker review.

For more information about New Jersey-friendly international poker sites, check out this page about N.J. internet poker. If you reside in another state, then perhaps this USA offshore poker guide would prove more helpful to you.

Aug. 20, 2025 – by Max Golden, Editor-in-Chief