Tennessee AG Moves to Shut Down Online Sweepstakes Casinos

Tennessee regulators are cracking down on online sweepstakes casinos, with the state attorney general ordering dozens of platforms to halt operations he says violate state gambling laws.

Attorney General Jonathan Skrmetti announced that his office has sent cease-and-desist letters to 38 online sweepstakes casinos, forcing them to shut down certain aspects of their operations in the state as part of an effort to protect consumers from illegal and unregulated gambling.

TN AG outlines legal case against sweepstakes casinos

Classifying the sweepstakes casinos as illegal, Skrmetti said the move is part of his ongoing push to protect Tennessee consumers from predatory gambling operations that operate outside regulatory oversight.

Sweepstakes casinos typically rely on a dual-currency system to exploit perceived loopholes in gambling laws. Skrmetti explained the practice in a statement released by his office.

“Online sweepstakes casinos typically allow participants to play traditional casino-style games like slot machines, table games or bingo with two types of virtual currencies, one of which can be redeemed for cash or other real-world prizes,” the statement said.

“This dual-currency system serves as a façade to hide the fact that participants may engage in real-money gambling on these platforms. The promotional sweepstakes model used by these casinos constitutes an illegal lottery prohibited by the Tennessee Constitution and violates Tennessee gambling and consumer-protection laws.”

Sweepstakes casinos named in cease-and-desist orders

The 38 online sweepstakes casinos that recieved cease-and-desist letters include:

Some platforms have already scaled back their operations in response to the cease-and-desist letters. Others were granted time to comply, and all pledged to restrict their operations within the next few weeks.

Skrmetti also warned other sweepstakes casinos considering entering the Tennessee market, saying, “Other sweepstakes casinos currently operating in Tennessee or contemplating entering the Tennessee marketplace should consider themselves on notice that illegal gambling will not be tolerated.”

In the meantime, Tennessee is providing help for people struggling with problem gambling. Residents are urged to call or text the REDLINE at 1-800-889-9789. The REDLINE is open 24/7, and all conversations are confidential. More resources are available through the Tennessee Department of Mental Health and Substance Abuse Services.

TN joins national crackdown on sweepstakes casinos

Tennessee is not the first state to crack down on sweepstakes and social casinos. The enforcement action reflects a growing national trend across several states, including New York, California, Florida and Indiana.

New York recently passed a bill banning sweepstakes and social casinos, classifying them as illegal. The move was supported by Gov. Kathy Hochul, Attorney General Letitia James and New York State Gaming Commission Chairman Brian O’Dwyer.

State Sen. Joseph P. Addabbo Jr., a longtime opponent of the platforms, addressed the issue in a June press release, saying, “At a time when illegal gambling, underage participation and identity theft are soaring, it is deeply concerning that prohibited, unregulated and unenforceable gambling entities are providing easy access to illegal gaming sites and obtaining personal information of unsuspecting New Yorkers.”

In California, the Los Angeles City Attorney’s Office escalated enforcement efforts by suing operators as well as their game providers. Other states cracking down on sweepstakes and social casinos include Nevada, New Jersey, Florida, Montana, Indiana and Connecticut.