Panel hears industry and AG office clash over online sweepstakes bill; committee rolls measure

House Bill 18-85, introduced to address illegal online sweepstakes casinos and expand consumer-protection enforcement, produced extended exchanges between industry representatives and legal officials over whether freemium sweepstakes models amount to gambling under Tennessee law.

Bill Gantz, an attorney representing VGW, said freemium social games are bona fide products and argued no purchase is necessary to play, noting "the median spend is about $25 a week" for paying users and that sweepstakes entries ("sweeps coins") "can never be purchased on the platform" but are awarded for free in connection with purchases or logging in. Gantz told the committee VGW agreed to stop offering sweepstakes services in Tennessee after a cease-and-desist from the AG's office but said the company's freemium products continue to operate.

Legal counsel Matt Mundy and representatives from the Attorney General's office (JP Urban and Kelly Groover) countered that the office has issued dozens of cease-and-desist letters to online casino operators and that dual-currency models (gold coins and sweeps coins) likely constitute consideration under the statute, creating a gambling paradigm that the AG's office believes courts would view as unlawful. Urban said the AG's office had sent approximately 38 cease-and-desist letters and is monitoring hundreds more operations, describing an "online epidemic" of such sites.

After detailed questioning about licensing, regulation and tax implications, the committee voted to roll the bill one week for further study and to allow additional legal and technical review rather than advance it at this meeting.