Tennessee Cites Consumer Protection in Sweepstakes Casino Ban Bill

Tennessee’s legislators are prepping a new bill aimed at banning sweepstakes casinos. House Bill 1885, introduced by Representative Scott Cepicky, seeks to classify these popular gaming platforms as “illegal gambling” and subject them to the state’s Consumer Protection Act of 1977. 

Cepicky’s bill defines “online sweepstakes games” as sites built on the dual-currency model, allowing their users to redeem their winnings for cash or other real-world rewards, such as gift checks and vouchers.

It argues that these gaming platforms act as a front for unregistered and unauthorized real money gambling activities. If passed, violators could face civil fines of up to $15,000.

Tennessee Gets Serious Against Sweepstakes Casino Games

Introduced on February 4th, the bill seeks to amend certain sections of the Tennessee Code, particularly on the state’s definition of gambling and the expansion of the authority of the sports wagering council. It redefines gambling as a violation of the Tennessee Consumer Protection Act, broadens the code’s coverage of gambling, and expands the authority of the state’s attorney general and the sports wagering council.

The bill designates violations as deceptive practices under the state’s Consumer Protection Act, recommending civil fines of up to $15,000 and injunctions. It protects players from unregulated gaming platforms designed as “free-to-play”, which it categorizes as a form of gambling. 

Section 4, which recommends the addition of Section 8-6-409: Requests for information and documents, expands the investigative powers of the attorney general and the sports wagering council. If passed, the designated authority can:

• Require individuals to file a report or explanation of an alleged violation
• Examine individuals under oath
• Examine merchandise (or services) deemed relevant to an ongoing investigation

Here’s How HB1885 Impacts Players and Operators

Once passed, players can no longer access popular sweepstakes casinos, as sites must close or restrict access. There are no specific penalties or fines for players since HB1885 prioritizes players’ protection against unlicensed websites which serve as fronts for illegal gambling. Players who want to continue playing may move to licensed sportsbooks.

For operators, the costs are high. Once approved, they can no longer operate sweepstakes casino games in the state or face civil fines. Interestingly, the bill’s language highlights the potential liability of payment processors, vendors, software vendors, and affiliates for running these games.

Tennessee’s bill mirrors the national trends, like in New York and California, forcing many sweepstakes casino operators to exit, rebrand, or change their business models.

HB1885 remains in early states, with no scheduled debates, readings, or votes as of February 9th.

REFERENCES

• HB1885