Two Sweepstakes Casinos Close Amid Tighter State Crackdowns

Two more online sweepstakes casinos have ceased operations this month after stronger regulatory crackdowns in US states.

Money Factory closed on Aug. 9, while CoinFrenzy announced it would shut down its platform on Sept. 25. 

Both sweepstakes casino operators announced their shutdowns with statements published to their respective sites. Money Factory said that it had decided to cease its operations after “careful consideration.” It added that players could no longer register on the site or make payments. 

The operator added that all player accounts, balances, and pending requests would be preserved, but did not mention how players could reclaim any money already wagered on the platform. They also provided an email address for players to contact with any queries, or those wanting access to account records. 

While it doesn't say why Money Factory decided to close its platform, some speculate the sweepstakes casino may have been short on cash. The operator also mentioned in its statement that it is exploring a potential acquisition of the group’s assets. 

CoinFrenzy, on the other hand, is still live, with a brief statement on its platform announcing it would cease operations on September 25. The operator said players can redeem any existing balances before the closing date and that it has stopped accepting new purchases. 

Money Factory and CoinFrenzy aren’t the only two sweepstakes casinos to halt operations in recent months. Last month, social casino operator VGW said it would close its North American platform, LuckyLand Slots, on Sept. 14. 

The closure comes amid tighter regulatory scrutiny from states. LuckyLand Slots faced a lawsuit in Maryland earlier this year, while multiple states have enacted restrictions on sweepstakes casino gaming.

Tennessee and Oklahoma enact sweepstakes gaming bans

Two states that imposed bans on sweepstakes casinos this year are Tennessee and Oklahoma. Tennessee lawmakers introduced their sweepstakes ban bill, HB1885 and SB2136, earlier in January, while Oklahoma introduced its own bill, SB1589, in February. 

Tennessee’s measure targets online sweepstakes casinos by amending its legal definition of gambling to include sweepstakes gaming and ensuring that it is unlawful under the Tennessee Consumer Protection Act. The bill also grants the state’s attorney general the power to pursue illegal gambling activity under the Protection Act and enact civil penalties. 

The bill was signed by Governor Bill Lee on May 22 and immediately enacted. 

In Oklahoma, lawmakers updated their definition of “online casino games” to include any online gambling that replicates slot machines, lottery games, bingo, and other prohibited games. The bill also updated its “representation of value” definition to include dual-currency payments that allow players to exchange virtual coins for real-world prizes. The measure also defines sweepstakes gaming as a C2 felony, with fines ranging from $500 to $2,000. 

SB1589 was sent to Governor Kevin Stitt on May 5 and vetoed on May 7. The state legislature then overruled his veto on May 14.