New Jersey has taken decisive action against unregulated online gambling models with the passage of Assembly Bill A5447, a sweeping piece of legislation that bans sweepstakes casinos across the state and raises tax rates on licensed iGaming operators.
The bill passed through both legislative chambers in early July 2025 and now awaits the signature of Governor Phil Murphy. Once enacted, the law will solidify New Jersey’s position as one of the most aggressive states when it comes to shutting down unlicensed online gambling platforms.
What Does A5447 Do?
Assembly Bill A5447 directly targets online casinos and sportsbooks operating under the sweepstakes model, which typically use virtual currencies like Gold Coins and Sweeps Coins to create the illusion of legal, free-to-play gaming. These platforms offer casino-style games and allow users to redeem promotional currency for cash prizes, operating under the premise that no purchase is necessary.
Under A5447:
- Sweepstakes-style casino and sportsbook platforms are explicitly banned.
- Any business offering prize redemption through promotional currency, without a license from the New Jersey Division of Gaming Enforcement, is considered to be engaged in illegal gambling.
- Payment processors, affiliates, and advertisers knowingly working with such platforms may also face penalties.
This bill comes as enforcement pressure grows nationally, and its language reflects a broader trend of cracking down on unregulated digital gambling under the sweepstakes label.
New iGaming Tax Hike Included
In addition to the ban on sweepstakes casinos, A5447 includes a tax increase on licensed iGaming operators, raising the tax rate on online casino revenue from 15% to 20%. The new tax revenue will be allocated in part to support responsible gambling programs and to fund enforcement efforts targeting illegal gambling operators.
This change has drawn attention from the licensed online gaming industry, which views the increase as a trade-off for a more stable, better-enforced market environment.
Why New Jersey Is Cracking Down
New Jersey has long been considered one of the most advanced states in terms of legal online gambling regulation. It was among the first to legalize online poker and casino games and has generated billions in tax revenue from licensed operators.
Sweepstakes casinos, however, have operated outside of the state’s regulatory framework, competing with licensed platforms without paying taxes, following consumer protection rules, or contributing to responsible gaming initiatives.
By banning sweepstakes platforms outright, lawmakers argue they are:
- Protecting consumers from deceptive gaming practices.
- Preserving the integrity of the state’s legal gambling market.
- Ensuring that all online gaming revenue is taxed and accounted for.
Impact on Operators and Players
If signed into law, A5447 would immediately prohibit sweepstakes casinos from serving New Jersey players. Major platforms like Chumba Casino, Pulsz, and others would need to block New Jersey users or face legal consequences.
For players, this means most sweepstakes sites will no longer be accessible from within the state. The bill does not impact purely social gaming sites that do not offer real-world prize redemption or monetary incentives.
On the iGaming side, licensed operators will need to adjust to the higher tax burden, but may benefit from reduced competition and a more level playing field.
What’s Next
Governor Murphy is expected to sign A5447 into law in the coming weeks, given strong bipartisan support and backing from both the New Jersey Division of Gaming Enforcement and responsible gambling advocates.
Once signed, enforcement will fall to the state’s gaming regulators and financial watchdogs. The bill also encourages cooperation with federal agencies to track and block financial flows tied to illegal gaming platforms.
New Jersey is setting a powerful precedent. By banning sweepstakes casinos and increasing taxes on licensed iGaming, the state is reinforcing its commitment to a transparent, regulated, and consumer-protected online gambling market. Assembly Bill A5447 is more than a local law—it may become a model for other states grappling with the rapid rise of sweepstakes gaming platforms.