Tennessee has joined a growing list of states moving aggressively to rein in online sweepstakes casinos. Across the country, this is signaling that regulators are no longer willing to tolerate gambling-style platforms operating outside established legal frameworks.
Attorney General Jonathan Skrmetti confirmed that his office issued cease-and-desist letters to nearly 40 sweepstakes-based online casinos offering casino-style games to residents in the state. According to the Attorney General’s Office, every platform contacted has either already removed the features considered unlawful or agreed to wind them down in the coming weeks. Officials said the action is part of an ongoing effort to protect consumers from unregulated and potentially predatory gambling activity.
The Background
At the center of the enforcement action is how sweepstakes casinos structure their products. These platforms typically mirror traditional online casinos, offering slots, table games, and bingo-style games. However, instead of direct wagering, they rely on a dual-currency system. One virtual currency is presented as free or promotional, while another can be redeemed for cash or real-world prizes. State regulators argue this setup is designed to create the appearance of a lawful sweepstakes while effectively enabling real-money gambling.
The Attorney General’s Office concluded that this model violates the Tennessee Constitution’s ban on illegal lotteries, as well as state gambling and consumer-protection laws. Skrmetti said the use of sweepstakes language is usually masks gambling activity and avoid the oversight that licensed operators must follow. Without regulation, he warned, players have no guarantees of fairness, transparency, or meaningful recourse.
A Growing National Trend
Tennessee’s crackdown brings more light to a wider national response as regulators in multiple states examine sweepstakes casinos more closely. According to Skrmetti, the growing scrutiny shows increasing concern that these platforms are exploiting legal gray areas to operate without licensing, taxation, or consumer safeguards. He emphasized that enforcement efforts will continue as long as operators attempt to bypass state laws.
The cease-and-desist notices went to dozens of popular sweepstakes platforms, including Chumba, Luckyland, WOW Vegas, High 5 Casino, McLuck, Global Poker, Stake, Zula Casino, and many others. State officials made clear that any remaining sweepstakes casinos operating in Tennessee, or considering entering the market, should view the action as a warning.
The Attorney General’s Office said it will continue monitoring the space and taking action to ensure illegal online gambling does not gain a foothold in the state. How this will play out in the long run will certainly cause more ripples across the sector.
