State legislatures in New Jersey and Mississippi recently introduced bills aimed at curtailing unregulated internet gaming. In doing so, New Jersey seeks to bring the evolving internet sweepstakes sector into its renowned gaming regulatory framework, while Mississippi furthers its long-standing opposition by broadening in its criminal code. These contrasting approaches demonstrate the challenges posed by the rapidly changing online gaming landscape.

New Jersey: Regulatory Framework for Sweepstakes Operators

New Jersey’s A5196, currently under review by the Assembly Tourism, Gaming, and the Arts Committee, aims to incorporate online sweepstakes into the state’s established internet gaming framework. By designating these contests as a form of internet gaming, the legislation extends the state’s stringent licensing and operational requirements to sweepstakes operators.

The bill defines an “online sweepstakes casino” as any internet or mobile  platform offering games that mimic authorized gambling games without requiring monetary investment. These platforms use free currency for gameplay and may award redeemable credits or prizes through various mechanisms, including random selection and bundled purchases. To operate legally, sweepstakes operators would need a state-issued license as a casino service industry enterprise, undergo independent audits, and partner with a licensed casino to secure an internet gaming permit.

Additionally, the Division of Gaming Enforcement (DGE) would oversee enforcement, with penalties for unlicensed operations including fines of $1,000 per player per day and $10,000 per advertising violation. By integrating online sweepstakes into its regulatory system, New Jersey aims to ensure consumer protection, operational transparency, and compliance with its robust gaming laws.

Mississippi: Broad Prohibition on Internet Gaming

Mississippi’s Senate Bill 2510 takes a markedly different approach by broadening its prohibitions on internet gaming. Recently referred to the Senate Judiciary, Division B Committee, the bill declares online, interactive, and computerized versions of casino games, sports betting, and sweepstakes contest as illegal gambling activities. Platforms offering such games are classified as gambling devices, making their operation within the state unlawful.

Under the proposed legislation, violations are elevated to felony offenses, carrying penalties of up to $100,000 in fines, imprisonment for up to 10 years, and the forfeiture of assets connected to illegal gaming activities. The Mississippi Gaming Commission is empowered to enforce these prohibitions, including the authority to seize and destroy unlawful gaming devices.

By expanding its statutory prohibition and enforcement mechanisms, Mississippi seeks to strengthen its stance against internet gaming.

Implications for the Industry

These legislative efforts illustrate the challenges states face in balancing innovation in the gaming industry with public policy. As more jurisdictions consider how to address the complexities of online gaming, New Jersey and Mississippi offer two contrasting blueprints for navigating this dynamic landscape.

IC360 is actively monitoring these legislative efforts and will issue additional alerts as needed. For more information or assistance, please contact Joe Casole or any of the professionals in the IC360 Advisory practice group.