Tennessee’s Attorney General Targets 40 Social Casinos with Cease-and-Desist Orders
Tennessee is emerging as a key battleground in the ongoing dispute between state regulators and social casinos operating under the sweepstakes model.
On December 29, Attorney General Jonathan Skrmetti issued cease-and-desist notices to 40 online social casino operators across the state. The letters claim these companies have been conducting gambling activities without the necessary state licenses.
Although Tennessee has not implemented a full prohibition, this move effectively pushes most social casino operators out of the state’s market. This increasing scrutiny follows similar actions by other states such as New York, which recently enforced a complete ban on sweepstakes casinos.
Tennessee Steps Up Enforcement Against Social Casinos
Social casinos typically use the sweepstakes format to avoid traditional gambling laws. However, critics argue that these platforms blur the line between gaming for entertainment and actual gambling, as many users expect to win real money.
The American Gaming Association’s research confirms that the majority of players engage with these sweepstakes casinos aiming to cash out winnings in real currency, highlighting the tension between the platforms’ stated intentions and player behavior.
Attorney General Skrmetti’s office emphasized these concerns in its recent warnings, asserting that despite operators’ claims of exemption from gaming regulations, these businesses are increasingly under legal scrutiny by state authorities aiming to protect consumers.
Regulators criticize the use of dual-purpose virtual currencies by these casinos as a tactic to introduce casino-like games without offering traditional protections found in regulated gambling establishments.
Legal Precedents and Industry Pushback
The social casino industry, represented by the Social Gaming Leadership Alliance (SGLA), argues that sweepstakes operations are backed by solid legal precedents and do not constitute illegal gambling.
Attorney General Skrmetti has rejected these claims, warning players about the risks of these platforms. He stated that online sweepstakes casinos prioritize taking players’ money over fairness or transparency, operating outside oversight mechanisms that protect consumers. His office is committed to removing these unauthorized operators and safeguarding Tennesseans from unlawful gambling.
The list of targeted sites includes well-known names such as WOW Vegas, High 5 Casino, Global Poker, and Zula Casino. This crackdown aligns with wider efforts in other states, including Indiana, where lawmakers are proposing legislation to outlaw sweepstakes casinos amidst growing opposition to the sector.
