Tennessee has become a new frontier for the battle between state regulators and attorneys general and social casinos.
The state’s AG, Jonathan Skrmetti, has sent a cease-and-desist letter to 40 online sweepstakes casinos in the Volunteer State, arguing that they have been operating without the proper license to conduct gaming activities.
The state so far has stopped short of a complete ban, but the latest measure is tantamount to turfing out the majroity of operators. New York recently enacted a complete sweepstakes casino ban.
Social casinos have long been using the “sweepstakes” model to circumvent established gaming laws, critics have vehemently insisted, pointing out a mismatch between player expectations and the platforms’ purported goal.
A study by the American Gaming Association has indicated that the vast majority of players play at sweepstakes casinos with the ambition to win real money, which is possible by cashing out one of the supported currencies by these platforms.
This is precisely the argument AG Skrmetti’s office made on Monday, December 29, when the notice was sent to 40 platforms operating within gaming licenses in the state. While these companies maintain that sweepstakes are not subject to gaming laws, this claim is increasingly coming under challenge by ambitious watchdogs and public prosecutors.
The employment of dual-use currency is scoffed at by state-level regulators, who find it as a way to introduce casino-style games to ordinary citizens but offer them none of the safeguards traditional casinos extend to their platforms, a popular argument runs.
Historic Precedent Argument Falls Flat on AG’s Ears
For its part, the social casino sector in the United States, through its flagship trade body, the Social Gaming Leadership Alliance (SGLA), has repeatedly argued that this was not true and that there was a very good historical precedent for sweepstakes operations. Skrmetti is loath to accept this argument, however, arguing instead:
“The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money. They work hard to make these sweepstakes casinos look legitimate, but at the end of the day, they are not. They avoid any oversight that could ensure honesty or fairness. Our Office was glad to chase these shady operations out of Tennessee and will keep working to protect Tennesseans from illegal gambling.”
Among the dozens of platforms banned are such websites as WOW Vegas, High 5 Casino, Global Poker, and Zula Casino. Indiana recently pitched a law that is also intended at outlawing sweepstakes casinos, as opposition against the sector is growing.
