Deputy Editor
New Jersey Gov. Phil Murphy signed a bill into law on Friday that immediately renders sweepstakes gambling, including poker, illegal in the state. The ban targets poker sites like Global Poker and ClubWPT Gold, ensuring that state-regulated ones will have the market to themselves.
The ban was considered all but inevitable after both New Jersey legislative chambers passed it in June without any serious debate. Gov. Murphy could have vetoed it, but it would have become law by default without his signature if he had waited much longer to act, as the 45-day deadline was approaching.
However, it’s politically meaningful that he ultimately gave the bill his stamp of approval, meaning the entire state government has aligned against sweepstakes sites.
The new law defines sweepstakes gaming as follows:
…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, is awarded, either directly or indirectly through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.
Most sweepstakes poker sites follow the dual-currency model. That is, they allow players to buy valueless play money and receive “free” sweepstakes coins along with it, the latter of which can then be used to win cash prizes.
However, similar sites that don’t use the dual currency model may be unaffected. ClubWPT (not to be confused with ClubWPT Gold) uses a subscription model and is still available in New Jersey for now—it’s unclear what its fate will be.
How Does Sweepstakes Ban Affect Poker Players?
New Jersey online poker players will only have access to real-money sites regulated and licensed through the state government.
In practice, most sweepstakes operators had already exited New Jersey. Global Poker, for example, already listed New Jersey among its prohibited states in its terms and conditions. However, ClubWPT Gold still has only Idaho, Washington, Michigan, and Montana listed as prohibited locales. Players can expect to see an update there soon.
World Poker Tour CEO Adam Pliska appeared before the New Jersey legislature in the summer in hopes of avoiding this outcome. He suggested that sweepstakes sites could become a revenue source for the state via taxation.
His appeals fell on deaf ears. Instead, New Jersey will only collect sweepstakes revenue through fines. The new law establishes penalties up to $100,000 for a first offense by an operator and up to $250,000 for offenses thereafter.
Are Any Sweepstakes Still Allowed In New Jersey?
The bill’s language attempts to ban the sweepstakes casino, poker, and sportsbook model without affecting traditional sweepstakes. That includes the typical promotional giveaways non-gaming companies use for promotional purposes.
To be legal, entry to the sweepstakes must be free or “ancillary to the purchase of food, non-alcoholic beverages, or other merchandise such as mugs, trinkets, or mementos, not exceeding $20 in value.” Every participant’s chance of winning must be identical, and the outcome must not hinge on the result of any sports event or contest.
Image credit: Edwin J. Torres/NJ Governor’s Office (license)
