Tennessee AG Shuts Down 38 Illegal Online Sweepstakes Casinos
Tennessee has taken one of its strongest enforcement steps yet against online sweepstakes casinos, pushing dozens of platforms to shut down or significantly alter their operations in the state.
In late December, the office of AG Jonathan Skrmetti confirmed that 38 online sweepstakes casinos had either exited Tennessee or brought their platforms into compliance after receiving cease-and-desist letters. According to the Attorney General’s office, these sites were operating as illegal gambling platforms while presenting themselves as sweepstakes-based entertainment.
State officials said the targeted operators relied on dual-currency systems that blurred the line between free play and real-money gambling. While players could receive promotional credits at no cost, they were also encouraged to purchase coins that could later be redeemed for prizes or cash equivalents. Regulators argued that this structure closely mirrors real-money casino gambling, which is prohibited under Tennessee’s constitution.
The enforcement action produced full compliance. Every operator that received a cease-and-desist notice either disabled sweepstakes gameplay for Tennessee users or committed to a complete withdrawal from the market. The list of affected platforms included several well-known sweepstakes brands with large user bases, not just smaller or lesser-known sites.
The Attorney General’s office said the crackdown was driven by consumer protection concerns. Officials warned that unregulated sweepstakes casinos operate without the licensing, audits, and safeguards required to ensure fairness, transparency, and responsible play. The office also made clear that any sweepstakes casinos still operating in Tennessee or considering entering the market should expect similar enforcement.
As iGaming News Today observed, Tennessee’s action reflects a broader national shift. In 2025, several states passed legislation explicitly banning online sweepstakes casinos, while others relied on existing laws and enforcement powers rather than new statutes. Tennessee’s case demonstrates that regulators do not need fresh legislation to act when platforms are viewed as crossing into illegal gambling.
For the sweepstakes sector, the message is increasingly clear. Regulatory tolerance is narrowing, legal grey areas are shrinking, and state-level enforcement risk is rising even in markets where sweepstakes models once operated with little resistance.
