Tennessee has joined a growing number of US states taking strong action against online sweepstakes casinos. This effort is part of a nationwide 2025 enforcement wave that has targeted sites such as Chumba, High 5, and Stake. Regulators say these platforms use what they call a dual-currency model to get around existing gambling laws.

Last week, Tennessee Attorney General Jonathan Skrmetti announced that his office had shut down multiple illegal online sweepstakes casinos. Nearly 40 websites received cease-and-desist letters and indicated their intent to comply. The action marks one of the largest single-state crackdowns on sweepstakes casinos in the country this year.

Attorney General Issues Strong Warning

Skrmetti was very clear about his frustration with the operators. In a public statement, he said, “The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money.” He added that the sites are made to look safe, but they are not.

“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,” he said.

Dual Currency System Called a Façade

According to the attorney general’s office, sweepstakes casinos usually let players start by using free coins. This gives the impression that the games are just for fun.

After that, players are encouraged to buy a different type of digital currency. This currency can later be exchanged for real cash prizes, which makes the games more like real gambling.

The state said the sites’ “dual-currency system serves as a façade to hide the fact that participants may engage in real-money gambling on these platforms.” Tennessee says this system breaks state gambling and consumer protection laws and counts as running an illegal lottery.

States Across the US Join the Crackdown

Tennessee’s crackdown is part of a bigger national effort. Skrmetti said the wave “reflects widespread concern over platforms using sweepstakes language as a loophole to run unregulated gambling operations.” Many states are taking steps to stop these online casinos.

New York and California have banned sweepstakes casinos, and Connecticut, Montana, and New Jersey have passed similar rules. In West Virginia, Delegate Shawn Fluharty said, “This issue has brought lawmakers together that it represents illegal gambling and revenue theft in many states.” The problem is getting attention because it affects the players and state money.

In Louisiana, the governor vetoed a ban, but regulators still sent 40 cease-and-desist letters. New bans have been introduced in Florida, Maine, and Indiana, and more states are expected to act in 2026.