Tennessee Requires 38 Sweepstakes Casinos to Disable Cash Redemptions

Tennessee Attorney General Jonathan Skrmetti has issued cease-and-desist letters to 38 sweepstakes-style online casinos, demanding they stop offering what the state considers illegal, unregulated casino gambling to Tennessee residents.

According to his office, the platforms use a dual-currency model that allows cash redemption, which regulators say masks real-money gambling and violates state law.

Tennessee has long drawn a hard line against real-money casino gambling, and state officials are now actively enforcing that position against sweepstakes-based gaming platforms. While these casinos present themselves as promotional entertainment services, authorities say the model offered to local players crosses into prohibited territory.

The dispute centers on how sweepstakes casinos function in practice. Users are typically given access to two forms of virtual currency. One is marketed as a bonus or promotional tool, yet it can be converted into cash or prizes. From the state’s perspective, this setup effectively recreates online casino play. Slot-style games, table formats, and withdrawal options remain available, even though the platforms are not licensed as gambling operators.

The Tennessee Attorney General has taken the position that this structure is illegal under state law. According to the office, offering prize-based sweepstakes that mimic casino gambling violates the Tennessee Constitution, regardless of whether free entry options are advertised. Officials argue that the format itself, not the marketing language, determines legality.

This action sends a broader signal to the industry. Regulatory pressure is no longer focused solely on offshore sportsbooks. Casino-like products framed as promotions are now being examined just as closely, particularly when they allow cash redemption and realistic gambling mechanics.

Casinos Ordered to Disable Features

State authorities have confirmed that cease-and-desist letters were sent to numerous sweepstakes casino brands. The list includes major names in the sector such as Chumba, LuckyLand, Global Poker, High 5 Casino, McLuck, WOW Vegas, Modo, Stake, and Zula. Dozens of smaller and mid-sized platforms were also contacted, including Crown Coins Casino, Fortune Coins, SpinBlitz, Sportzino, StormRush, Tao Fortune, and Yay Casino.

Officials say the companies involved have either already removed the disputed features for Tennessee users or agreed to do so in the coming weeks.

Why Tennessee Is a Pressure Point

Tennessee’s gambling framework is narrow by design. The state allows online sports betting through licensed operators but has repeatedly rejected broader online casino legalization. That makes sweepstakes platforms particularly vulnerable, as they appear to replicate casino gaming without fitting into the state’s regulatory model.

The impact may reach further than the casinos themselves. Game developers and platform providers are being forced to reconsider where their products are available. Payment processing and user registration systems are under closer review, as regulators focus on how money enters and exits these platforms. Marketing partners and influencers may also face exposure if their campaigns are viewed as promoting illegal gambling.

Tennessee’s move suggests that the sweepstakes casino sector is entering a more confrontational phase, with enforcement actions likely to shape how these platforms operate across the U.S.