Crackdown On Unlicensed Sweepstakes Casinos

Tennessee continues to crack down on unlicensed sports betting and sweepstakes casinos operating in the state.

The Office of Tennessee Attorney General Jonathan Skrmetti announced Monday that it sent cease-and-desist letters to 38 online sweepstakes platforms it says are operating illegally in Tennessee.

All of the targeted companies have either already disabled unlawful features or agreed to exit the state in the coming weeks, according to the Attorney General’s Office.

‘Masked Illegal Gambling’ Concerns

The enforcement action targets sweepstakes casinos that offer online casino games such as slots or table games using dual-currency systems that allow players to redeem virtual currency for real-world prizes. According to the Attorney General’s Office, that structure effectively masks illegal gambling activity and violates both the Tennessee Constitution and state consumer protection laws.

“The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money,” Skrmetti said in a statement. “They work hard to make these sweepstakes casinos look legitimate, but at the end of the day they are not.”

Among the platforms that received cease-and-desist letters and agreed to comply were several widely known sweepstakes operators, including Chumba, Global Poker, Luckyland, High 5 Casino, WOW Vegas, Zula Casino, McLuck, FunzCity, Fortune Coins, Stake, among others.

National Focus On Sweepstakes Casinos

The move mirrors enforcement actions unfolding across the country, as state regulators push back against platforms using sweepstakes models to bypass gambling laws.

New York’s legislation to ban sweepstakes casinos was signed earlier this month, while California recently passed legislation banning dual-currency sweepstakes platforms beginning in 2026. Other states like Connecticut, Michigan and Maryland have issued cease-and-desist letters targeting similar operations in recent months as well.

A survey commissioned earlier this year by the American Gaming Association found that 90% of respondents believe sweepstakes games are likely gambling, with 59% calling them “definitely” gambling and another 31% saying “probably.”

The same research found that states with stricter enforcement actions have significantly fewer sweepstakes players.

Tennessee Among Most Aggressive States

Tennessee has increasingly positioned itself as one of the most aggressive states in policing unlicensed gambling.

In recent months, the Tennessee Sports Wagering Council has issued fines and cease-and-desist letters to offshore sportsbooks while urging federal regulators to rein in prediction markets it views as unlawful sports betting.

The state has also warned that businesses facilitating or promoting illegal gambling could face penalties under Tennessee law and that any remaining or incoming violators should view the crackdown as a clear signal that illegal gambling will not be tolerated.

Photo by AP Photo/Mark Humphrey