Tennessee has become the latest state to take decisive action against online sweepstakes casinos, with Attorney General Jonathan Skrmetti issuing cease-and-desist orders to nearly 40 operators accused of running illegal gambling platforms.
The move represents one of the most aggressive state-level crackdowns on sweepstakes casinos to date and adds momentum to a growing national effort to rein in unregulated online gaming models.
Why Sweepstakes Casinos Are Under Fire
Sweepstakes casinos operate using a dual-currency system designed to mirror real-money online casinos while avoiding gambling regulations. Players are typically given free “gold coins” for social play, while a second currency — often marketed as sweepstakes or promotional credits — can be used to play games that offer cash or prize redemptions.
State regulators argue that this structure crosses the line into illegal gambling when players are able to redeem winnings for real-world value. In Tennessee, officials have determined that these platforms violate state law by functioning as unlicensed gambling operations and illegal lotteries.
According to the Attorney General’s office, sweepstakes casinos intentionally present themselves as legitimate gaming sites while avoiding the licensing, consumer protections, and regulatory oversight required of lawful gambling operators.
What the Enforcement Means for Operators
Nearly 40 sweepstakes casino brands received formal cease-and-desist notices. State officials say all targeted operators have either already disabled their sweepstakes features for Tennessee players or committed to shutting down operations in the state altogether.
For operators, the action underscores increasing legal risk in states that do not authorize online casino gaming. Tennessee currently allows regulated online sports betting but does not permit online casinos, leaving little room for alternative gaming models that involve cash prizes or redemptions.
Impact on Tennessee Players
For players, the crackdown means sweepstakes casinos will no longer be legally accessible in Tennessee in their current form. Some platforms may continue to offer free-to-play social games, but without the ability to redeem winnings for cash or prizes.
Players with existing balances or pending redemptions may see changes to withdrawal policies, account access, or gameplay features, depending on how individual platforms implement compliance measures. Anyone who previously played on sweepstakes casinos from Tennessee should review operator communications carefully.
Part of a Broader National Trend
Tennessee’s action reflects a larger shift across the U.S. as regulators and lawmakers take a closer look at sweepstakes-based gaming. Several states have already banned or restricted sweepstakes casinos outright, while others are actively considering legislation or enforcement actions targeting similar models.
The central issue is whether sweepstakes casinos genuinely fall outside gambling laws — an argument regulators increasingly reject as these platforms continue to resemble traditional online casinos in both gameplay and monetization.
What Comes Next
For the online gambling industry, Tennessee’s move raises important questions about the future of sweepstakes casinos in the U.S. Operators may attempt to redesign their platforms, challenge enforcement actions, or pivot toward fully regulated markets where available.
For players, the message is clear: the availability of sweepstakes casinos is becoming increasingly state-specific, and legal gray areas are rapidly disappearing. As enforcement expands, players should stay informed about which platforms operate legally in their state — and which ones don’t.
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