In a report submitted to the Governor of New Jersey, the Responsible Gaming Task Force focuses on the rise of unregulated gambling. The report identifies four main areas of unregulated betting: social and sweepstakes casinos, prediction markets, skill-based games wagering, and illegal operators.
There is concern that a growing number of New Jersey residents are engaging in these forms of unregulated betting. The report states, “28% of New Jerseyans have reported engaging in one or more forms of unregulated or illicit gambling in the past 24 months.”
The report mentions that alternative gambling sites that use sweepstakes models have grown more and more popular. “The exponential increase in sweepstakes and social casino operations based on a sweepstakes model has drawn the attention of numerous state gaming regulators in recent years.
“While traditional sweepstakes and horse racing sweepstake activity are legal under federal law and the laws of many states, including in New Jersey, recently operators have introduced new types of sweepstakes that allow participants to have the same experience as they do with actual gambling.”
The report also says there are concerns over under-21-year-olds accessing these sites and engaging in gambling activity. This heightens the risk of addiction and gambling disorders later in life.
Prediction markets
Prediction markets have been a hot topic in the news recently. New Jersey’s Attorney General submitted a response to Kalshi’s lawsuit in the state this week, and the report also goes into detail on the subject.
Markets on the US Presidential election last year proved extremely popular on prediction market sites. The Task Force notes that election betting is prohibited in New Jersey, as well as other concerns that event contracts “circumvent state regulatory frameworks.”
Despite opposition from state regulators, the report notes, “events-based contracts have expanded wagering markets to include hundreds of events, such as Grammy winners and sports markets, including wagering on the 2025 Super Bowl, the 2025 NCAA men’s college basketball championship, the 2025 NBA Finals, and the 2025 Masters.”
More recently, sites such as Kalshi have also begun to offer NBA, MLB, and NHL match winner event contracts. The discussions over their legality and regulation will continue.
Recommendations for safer gambling
The report, which can be read in full here makes several recommendations to address concerns over the legal and unregulated gambling industry. These measures focus on controlling advertising, education programs, treatment for gambling disorders, and redistribution of funds for increased regulation.
New Jersey residents are also taking measures themselves against gambling problems. In 2024, 31,405 individuals self-excluded from gambling sites. That marks a huge increase from 13,107 in 2021.
As the report notes, however, more and more residents are gambling from a young age. Online gambling is most popular among 18-to 24-year-olds, with many using social and sweepstakes casinos before the age of 21.
State Governor Phil Murphy will no doubt analyse the findings of the report and lawmakers may propose new bills for increased regulation.
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