Tennessee Joins the Battle Against Sweepstakes Casinos

For several years, sweepstakes casinos were operating in as many as 38 states without impunity. Those days are in the past as a growing number of state regulators are moving to ban these "free" online casinos.

So far, at least six states have put bans in place. That includes Connecticut, Idaho, Maryland, Montana, New Jersey, and Washington state. With similar legislation pending in a dozen or so other states, Tennessee's Attorney General has announced that his state is also taking up the battle to ban these online casino websites.

Attorney General Jonathan Skrmetti announced to the press that his office has formally sent cease-and-desist letters to the 38 known online sweepstakes casinos that are operating within Tennessee's borders. He is effectively trying to force them to shut down certain aspects of online casino operations. He describes this move as an effort to protect consumers from the possible rogue activities that often come with unregulated gambling.

Ot's widely known that such casinos operate while relying on a dual-currency system that includes "free gold coins" and sweeps or sweepstakes coins that could have redemption value. In a statement released to the press, Skrmetti described it this way:

"Online sweepstakes casinos typically allow participants to play traditional casino-style games like slot machines, table games, or bingo with two types of virtual currencies, one of which can be redeemed for cash or other real-world prizes.” 

The mention of real-world prizes is interesting. It could include any number of prize packages, including:

• Gift cards from major merchandisers


• Exotic travel and vacation packages


• Electronics - TVs, PCs, laptops, tablets, and smartphones


• Concert and event tickets (Super Bowl, March Madness, etc.)


• Actual cash or prepaid debit cards
  

He later added the following quote:

"This dual-currency system serves as a façade to hide the fact that participants may engage in real-money gambling on these platforms. The promotional sweepstakes model used by these casinos constitutes an illegal lottery prohibited by the Tennessee Constitution and violates Tennessee gambling and consumer-protection laws.”

The Reaction from Casino Operators

Fearing fines and serious repercussions, many of the sweepstakes casinos currently operating in the state have already started restricting operations. In some cases, that means not allowing Tennessee players to have access to sweepstakes coins, creating a free online casino experience. Other sites have declared their intent to comply with the cease-and-desist while only seeking time to comply.

It's noteworthy that several operators have expressed a desire to pushback against the orders to test the legality of them. Add that to several new online sweepstakes casinos that are contemplating moving into the state, and the battle lines are being drawn.

The relevance of these battles cannot be overstated. While only seven states have formally legalized online casino gambling, it has left a lot of American casino gaming enthusiasts with a thirst for online access to casino games. The answer to whether or not social casinos will be the answer in the future is yet to be formulated.