Tennessee Sends Cease-and-Desists to Nearly 40 Sweepstakes Casinos

Tennessee officials confirmed that they shut down numerous online sweepstakes casinos that had operated illegally inside state lines.

Attorney General (AG) Jonathan Skrmetti revealed on Monday that his office issued cease-and-desist letters to close to 40 platforms that were found to have violated the state’s gaming laws. These platforms had not received state licensing and had offered unapproved forms of gambling to residents.

All of the recipients of the cease-and-desists either blocked their illegal amenities or provided a date by which their platforms would be shut down, according to a statement issued by the AG’s office.

Casinos agree to shut down, block illegal aspects

Tennessee gaming regulators concluded that the dual-currency model utilized by sweepstakes casinos violated the state Constitution, as well as gaming and consumer protection standards. 

The announcement confirmed that the guilty platforms had been notified that they were required to remove their illegal offerings or be subject to further legal action.

“Attorney General Jonathan Skrmetti announced (Monday) that his office has successfully halted the operation of multiple illegal online sweepstakes casinos in Tennessee,” the announcement read. “This action is part of the Attorney General’s ongoing effort to protect Tennessee consumers from predatory and unregulated gambling operations.”

One of the main concerns with these platforms was their misleading nature. While they do not require patrons to provide money to access them, they mirror online casino gambling and accept real-money payments for coins, which can be used to play games that win prizes.

All of the following sweepstakes operators received cease-and-desists from the Tennessee Attorney General: American Luck, Cazino, Chanced, Chumba, Crown Coins Casino, Fortune Coins, Fortune Wheelz, Funrize, FunzCity, Global Poker, Golden Hearts Games, Hello Millions, High 5 Casino, iCasino, Jackpota, Legendz, LoneStar, Luckyland, McLuck, Mega Bonanza, MegaFrenzy, Modo, Moonspin, NoLimitCoins, Dec. 29, PlayFame, Punt, RealPrize, Rolla, SpinBlitz, Sportzino, Spree Social Casino, Stake, StormRush, Tao Fortune, The Money Factory, WOW Vegas, Yay Casino, Zula Casino.

Tennessee joins national trend

Tennessee’s regulatory action mirrors that in other states that have found sweepstakes casinos to violate various laws.

The dual-currency model used by sweepstakes casinos involves gold coins and sweeps coins. Customers can earn coins by playing games and do not need to make purchases to use the platform’s features, although coins can also be purchased. Consumers can also win prizes by playing different games, including more coins, gift cards, and real-world prizes.

Although Tennessee’s regulators did not mention the financial aspect of their enforcement, they said that the cash-redeemable aspect of their platform must be removed.

Tennessee law only allows for certain approved forms of gambling, including the state lottery and online sports betting. Notably, Tennessee lawmakers have not approved retail or online casino gambling.

Elsewhere around the country, California and New York this year passed legislation banning sweepstakes casinos. Connecticut, New Jersey, and Montana also have bans in place, and states such as Michigan and Massachusetts have actively sent batches of cease-and-desists to maintain purity in their gaming markets.

With states continuing to hit back at sweepstakes casinos, their viability is becoming increasingly questionable.