A New Jersey legislator has reversed course on sweepstakes gaming.

Assemblyman Clinton Calabrese just recently submitted expense A5447 calling for a ban on the questionable online social gambling establishments and sportsbooks less than 2 months after proposing legalization.

Calabrese's most current costs desires to "prohibit sweepstakes design of betting" and establish "new penalties for unlawful gambling operations and practices." The legislation also calls for the New Jersey Division of Consumer Affairs and Division of Gaming Enforcement to implement those penalties.

In January, Calabrese presented A5196, a bill that designated "sweepstakes gambling establishments as internet gaming" with license, oversight, and tax requirements equivalent to the legal iGaming that New Jersey currently enables and controls.

Under fire

Sweepstakes gaming differs from conventional online casinos and sportsbooks in that it uses free coins to play games. Additional coins can be bought and exchanged for money and prizes on slots, table games, and sports betting.

These operators, like McLuck, Chumba Casino, and High 5, aren't managed or taxed in legal and unlawful U.S. gambling jurisdictions.

The industry has taken off over the last couple of years with income estimates in the U.S. alone reaching $6.9 billion in 2025.

Also understood as social gambling establishments, sweepstakes business' effect has largely gone unnoticed by legislators and regulators. However, in 2015, the American Gaming Association, a U.S. trade market group for sportsbooks and iGaming operators, asked states to examine their laws and determine whether sweepstakes business are operating lawfully.

The Indian Gaming Association has publicly decreed that sweepstakes gaming is prohibited and has actually asked state Attorney Generals to take action. The IGA argues that unregulated, untaxed betting money is going to social video gaming companies that ought to be going to people and industrial operators.

Taking action

The Garden State is among seven U.S. jurisdictions with legal iGaming. It currently has nearly 30 licensed online gambling establishment and poker operators and more than a dozen mobile sportsbooks.

A New Jersey resident submitted a suit versus numerous sweepstakes video gaming business, including McLuck, High 5, Wow Vegas, and CrownCoins, for running illegally. Apple and Google were likewise called for supporting illegal gambling platforms.

New Jersey isn't the only state considering a position on sweepstakes gaming. On Monday, the Senate Budget and Taxation Committee passed a Maryland bill that would prohibit social operators in a non-iGaming legal state by a vote of 13-0.