On Tuesday, the Tennessee House Departments and Agencies Subcommittee Committee placed a unanimous vote of 8-0 on House Bill 1885 and the bill moved on to full committee.
“What this (bill) does is it removes online sweepstakes game as a prohibitive activity under section one of the bill, which would expand the investigative authority of the Attorney General to investigate and issue civil penalties related to online sweepstakes gaming activity as a violation of the Consumer Protection Act,” said Rep. Scott Cepicky, the bill’s main sponsor.
Religious stakeholders back TN sweeps ban
Charles Armstead, leader of the Religious Coalition of the National Stop Predatory Gambling Foundation, testified.
“This bill said that illegal gambling violates the Consumer Protection Act, and now it’s amended,” Armstead said. “I’m not sure what it says, but the Consumer Protection Act tells us that all businesses do not deceive, manipulate, or scam Tennessee. And so, we need to stop illegal gambling and we’re in favor of that. At the same time, we need to apply the same Consumer Protection Act to our approved sports gambling companies because they also deceive, manipulate, and scam sports gamblers.”
Armstead said whatever applies to the bill also applies to investigating the state’s sports gambling that Tennessee legalized “because they also deceive, manipulate and scam.”
Sweeps casinos maintain they are not illegal gambling because players don’t have to put in any money in order to play.
What HB1885 does
HB 1885 creates a new definition of an “online sweepstakes game” designed to capture the dual-currency model used by sweepstakes casinos.
The bill defines an online sweepstakes game as gambling that: “utilizes a virtual-currency system allowing a player to … play or participate with a currency … that is directly purchased, received through a bonus or promotion, or received for free with the purchase of another type of currency,” and to “exchange the currency for a prize, award, cash, or cash equivalent.”
It specifies that covered platforms include those that: “simulate gambling of any kind, including, but not limited to, casino-style gaming such as slot machines, video poker, table games, lottery games, bingo, or unlicensed sports wagering.”
Under the bill’s prohibition section, the conduct is declared unlawful: “The operation, conducting, or commercial promoting of online sweepstakes games and other forms of online or app-based gambling are unlawful and are offenses against the public health, safety, and welfare of this state.”
The bill also makes it illegal to “support, facilitate, or assist in the operation of online sweepstakes games” within Tennessee. That broadens enforcement beyond operators to vendors, partners, and other intermediaries.
Earler this month, the Tennessee Senate unanimously passed Senate Bill 2136 — and it was officially transferred over to the House. SB2136 is the second bill in Tennessee that would outlaw Sweeps Coin gameplay.
There are cease-and-desists in TN, as well
At the end of December, Attorney General Jonathan Skrmetti announced that his office had issued cease-and-desist letters to nearly 40 online sweepstakes casinos operating in the state.
In a Dec. 29 press release, Skrmetti said his office had “successfully halted the operation of multiple illegal online sweepstakes casinos in Tennessee.”
He described the dual-currency sweepstakes model as “a façade to hide the fact that participants may engage in real-money gambling.”
“The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money,” Skrmetti added. “They avoid any oversight that could ensure honesty or fairness.”
According to the Attorney General’s office, all platforms that received cease-and-desist letters either disabled the sweepstakes components of their products or agreed to wind down their Tennessee operations, effectively ending their Tennessee-facing operations.
