Tennessee Sees Mass Departure of Sweepstakes Casinos Amid Regulatory Crackdown

The “Silent” Enforcement

Industry analysis indicates that the impetus for these closures comes from the office of Tennessee Attorney General Jonathan Skrmetti rather than the Tennessee Sports Wagering Council. While the Council oversees licensed sportsbooks, the Attorney General holds the authority to interpret and enforce consumer protection and gambling laws.

The rapid, synchronized departure of five separate brands implies that the state has formally challenged the legality of the “dual-currency” model these sites utilize.

The enforcement appears to target the specific mechanic of “Sweeps Coins.” In this model, players purchase non-redeemable “Gold Coins” for entertainment but receive “Sweeps Coins” as a bonus.

These bonus coins can be used to play casino-style games and eventually redeemed for cash prizes. Regulators across the United States are increasingly scrutinizing this structure, arguing that it functions as a loophole to offer unlicensed internet gambling.

Divergent Exit Strategies

Operators are handling the crackdown with two distinct strategies: total market abandonment or a pivot to a social-only model. Stake.us has taken the most drastic measure, announcing that Tennessee will be added to its list of restricted jurisdictions on December 19.

This constitutes a full platform shutdown, barring residents from accessing both real-money redemption play and free entertainment modes. Lucky Bits Vegas has also opted to close its operations in the state entirely.

In contrast, other operators are attempting to salvage their user base by removing the financial component while keeping the games online. RealPlay Tech Inc., the parent company of RealPrize and LoneStar Casino, informed players that effective November 24, 2025, it would cease all Sweeps Coins gameplay.

However, these sites will remain accessible for “Gold Coin” play. This effectively converts the platforms into standard social casinos where users play strictly for amusement with no option to win money. High 5 Casino is executing a similar two-phase transition, cutting off sweepstakes access while maintaining its social gaming infrastructure.

Stake.us Faces a Parallel Crisis in California

The regulatory squeeze on Stake.us extends well beyond Tennessee. The operator has confirmed a complete withdrawal from California, set to finalize by December 30, 2025. This exit is a direct response to the upcoming enactment of Assembly Bill 831. Signed by Governor Gavin Newsom, this legislation explicitly prohibits sweepstakes operators from mimicking casino gambling ecosystems.

The situation in California is compounded by active litigation. A lawsuit filed in Los Angeles County Superior Court against Sweepsteaks Ltd., the platform’s parent company, alleges the site conducts illegal real-money gambling while masquerading as a free-to-play service.

Facing these headwinds, Stake.us has already lost access to game content from major providers like NetEnt and Red Tiger in the state. After the December deadline, California accounts will shift to a “Redeem Only” status, allowing users to withdraw remaining balances but preventing any further participation in games or promotions.