Tennessee’s Attorney General, Jonathan Skrmetti, has issued a cease-and-desist order to 40 online sweepstakes casinos, asserting that these platforms have been operating without proper gaming licenses. This action marks a significant escalation in the ongoing regulatory push against social casinos in the state. While Tennessee has not implemented a complete ban on these operations, this latest directive effectively removes a majority of the operators from the market.
The move comes amid a broader nationwide trend, as states like New York have recently enacted stringent regulations against sweepstakes casinos. These platforms have long been accused of exploiting the sweepstakes model to bypass established gaming laws. Critics argue that this creates a disparity between player expectations and the actual offerings of these platforms. According to a study by the American Gaming Association, most players engage with sweepstakes casinos with the intention of winning real money, which can be withdrawn through supported currencies.
On December 29, 2023, Skrmetti’s office formally communicated the cease-and-desist orders to the implicated platforms. Although the operators maintain that their sweepstakes are not subject to gaming regulations, this assertion is increasingly being scrutinized by regulators and legal authorities. State officials contend that the use of dual-use currency serves primarily to introduce casino-style gaming to consumers without the safeguards typically provided by traditional casinos.
Regulatory Stance and Industry Response
The social casino sector, represented by the Social Gaming Leadership Alliance (SGLA), has consistently defended its operations. They argue that there is a historical precedent for sweepstakes that should exempt them from such scrutiny. However, Skrmetti remains unconvinced, stating, “The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money. They work hard to make these sweepstakes casinos look legitimate, but at the end of the day, they are not. They avoid any oversight that could ensure honesty or fairness.”
Among the platforms affected by this recent crackdown are notable websites such as WOW Vegas, High 5 Casino, Global Poker, and Zula Casino. The regulatory landscape is shifting, with states like Indiana also proposing legislation aimed at curbing the operations of sweepstakes casinos. This growing opposition signifies a concerted effort by state regulators to address what they perceive as a loophole in gaming laws.
As the conflict between state regulators and social casino operators continues to unfold, Tennessee’s actions reflect a broader concern over consumer protection and the integrity of gaming practices. The implications for both players and operators could be significant as enforcement efforts escalate across the country.
