Tennessee / Legal position gauge

Elevated risk

Editorial assessment from Tennessee-specific research—not legal approval. Licensed Tennessee counsel must review before any deployment decision.

Why this rating?

Tennessee defines gambling as risking anything of value for a profit “whose return is to any degree contingent on chance,” or any casino-style game of chance including slot machines (Tenn. Code Ann. § 39-17-501(2)). That is an any-chance test, not predominance. Independently, Article XI, Section 5 forbids lotteries the General Assembly cannot authorize by renaming consideration (Tenn. Const. art. XI, § 5; St. Augustine Church). A lottery is “the selling of anything of value for chances on a prize or stake” (§ 39-17-501(6)). On July 14, 2025, a three-judge Shelby County Chancery panel held Torch Electronics’ predetermined-pool terminals branded “No Chance Games” to be illegal gambling devices; that order is on appeal and is not appellate precedent (Torch). The Attorney General’s December 2025 sweepstakes-casino campaign and Public Chapter 1117 (effective May 27, 2026) treat dual-currency sweepstakes and gambling devices as unlawful consumer-protection violations. Current law has no cash-prize amusement exemption; the coin-operated amusement tax expressly does not legalize gambling. No reported Tennessee appellate decision has tested mandatory pre-reveal with exact monetary disclosure, genuine accept/decline, and no charge on decline. That untested timing distinction, plus the absence of any case against a full-pool reveal with mandatory pre-reveal, drops the rating from high risk to elevated. Torch tested an optional prize viewer after a balance was already on the machine—not this architecture. The any-degree statute and Article XI, Section 5 keep the rating out of the moderate band.

This gauge also weighs that we identified no charges and no decided case in Tennessee against a game that used a full-pool reveal together with mandatory pre-reveal. Banilla, Torch, and JD Prime used an optional viewer of the next assigned result after money was already on the machine. Café terminals paid first, then revealed. Those fact patterns are not this architecture and do not, by themselves, set the rating.

Scale: High risk → Elevated risk → Moderate risk → Unsettled → Moderately favorable → Favorable → Strong position. These are editorial categories, not probabilities of approval or findings of legality.

Source review date: . Has this exact model been tested? · Counsel checklist · Authorities

NCG GAMESTennessee position brief
Tennessee  /  Position brief

“To any degree contingent on chance.”
The Legislature cannot rename a lottery.

Tennessee does not ask whether chance predominates. Section 39-17-501 asks whether the return is contingent on chance to any degree. Article XI, Section 5 independently forbids lotteries; Secretary of State v. St. Augustine Church held that the General Assembly cannot authorize one by redefining consideration. In 2025 a three-judge panel rejected terminals branded “No Chance Games.” The NCG position is that those authorities never tested a transaction that discloses the exact monetary result before the player can commit funds and charges nothing on decline.

Working position

This brief analyzes the proposed transaction architecture under current Tennessee law. It is not a finding of legality, Sports Wagering Council approval, Education Lottery authorization, or permission to operate cash-prize devices. Authorized channels are narrow: the state education lottery, licensed sports wagering, fantasy sports under the Fantasy Sports Act, two-thirds-approved nonprofit annual events, low-level sports entertainment pools, and ordinary lawful business transactions. Casino-style games and slot machines are expressly outside the constitutional lottery amendment.

Safeguard 1

Exact cost and result are known before acceptance.

Before the player becomes financially committed to a transaction, the system discloses the exact transaction cost and exact monetary result. Accept processes only those disclosed terms.

Why this matters under Tennessee law

§ 39-17-501(2) requires risking value for a profit whose return is to any degree contingent on chance. If the economic outcome is already fixed and disclosed before Accept, the strongest NCG argument is that the player is not risking value for an unresolved return—they are accepting a disclosed, predetermined transaction whose result is already known. The lottery definition similarly requires selling value “for chances” on a prize, not for a stated amount.

Contrary authority

Torch involved machines marketed as eliminating chance through predetermination and a prize viewer of the next assigned result. The chancery panel still classified them as gambling devices. Prosecutors will argue casino-style presentation plus a credit balance is enough under the any-degree test and the slot-machine clause, and that viewing a result after money is on the device is not a new legal category.

Implementation risk

Weakening factors: showing cost/result after partial payment, allowing acceptance before disclosure renders, optional rather than mandatory reveal, or mismatch between displayed and settled amounts. Any of those would collapse the only distinction from Torch’s prize-viewer fact pattern.

Tenn. Code Ann. § 39-17-501(2)Timing of the “return” is critical
Safeguard 2

Viewing the offer does not require payment.

The player may see the disclosed offer—including zero or negative-net outcomes—without paying for that transaction. Declining imposes no charge for that offer.

Why timing of consideration matters

AG Opinions 99-146 and 02-089 treated pay-then-reveal product-plus-chance machines as lotteries and gambling devices. Torch customers typically funded a balance, then could view the next assigned result. NCG separates inspection from commitment: no consideration moves for a declined offer. That is the factual distinction those materials did not decide as a matter of appellate law.

Contrary authority

Prosecutors may argue the player purchased access to a sequence of offers by earlier deposit, and that each Accept still “risks” credits. Opinion 05-068 treats accumulated credits as consideration. St. Augustine Church forbids curing consideration by renaming it. Public Chapter 1117’s “online sweepstakes game” definition reaches virtual currency purchased or received with another purchase and exchanged for a prize or a chance at a prize.

Op. Tenn. Att’y Gen. 02-089No payment on decline
Safeguard 3

Monetary results and reel positions are predetermined.

Monetary outcomes are fixed before acceptance within a finite predetermined pool. Reels, symbols, and entertainment layers cannot modify the disclosed monetary result after acceptance.

Distinction from Tennessee authorities

Predetermination is not a statutory defense. Torch’s product name was “No Chance Games.” The panel still held the machines were gambling devices. Burkhart found video slot cabinets with knock-off switches and retention meters to be gambling devices; skill was not required, and recorded credits mattered. NCG’s distinction is not predetermination alone—it is predetermination plus disclosure before financial commitment plus a free decline.

No cash amusement path

The pre-1989 amusement-replay proviso (former Tenn. Code Ann. § 39-6-601(4)—no more than fifteen unrecorded free replays, one-for-one replay use, no permanent replay record) was not reenacted as a cash-prize exemption. Burkhart cited Sentencing Commission Comments that the 1989 definitions are “intentionally broader than those found in prior law.” Title 67’s bona fide coin-operated amusement machine definition excludes any device operated for unlawful gambling. Do not market NCG as a taxed amusement machine.

Device and reel presentation

§ 39-17-501(2) independently lists slot machines as games of chance associated with casinos. A cabinet that looks and plays like a slot invites that clause even if the monetary result was assigned earlier. Burkhart rejected a vagueness challenge as applied to such cabinets.

Safeguard 4

The player may stop and redeem—including cents.

Eligible remaining credits may be redeemed without further play. Redemption includes fractional dollars; balances are not rounded down to trap value in the machine.

Effect on Tennessee analysis

Full redemption supports the argument that only accepted transactions consume value and that the player retains a genuine exit. It may mitigate “trapped balance” or forced-continued-play theories. Torch’s public descriptions also claimed anytime redemption; that feature did not prevent an adverse chancery order.

Limitation

Redemption does not cure an otherwise unlawful gambling transaction or lottery. Devices and records are contraband and forfeitable (§ 39-17-505). Public Chapter 1117 adds Consumer Protection Act remedies, including for permitting devices on controlled premises.

ILLUSTRATIVE CASH-OUT

$22.00 ticket+$0.67 cents$0.00 remaining
Tenn. Code Ann. § 39-17-505Exit rights ≠ legality
Safeguard 5

Software enforces non-bypassable rules.

Mandatory pre-reveal, accept/decline, no post-acceptance RNG, predetermined reels, and redemption rules are architecturally enforced—not merely published as disclaimers.

Why enforcement matters in Tennessee

Tennessee authorities look at objective mechanics, not marketing. St. Augustine Church disregarded “charitable donation.” The AG opinions disregarded “collector cards,” “psychic reading” cards, and “no purchase necessary” rules when players were paying to play. Torch disregarded “No Chance Games.” Software enforcement is how the timing distinction can be proved if charges are brought under §§ 39-17-503–506 or civilly under Public Chapter 1117.

Implementation risks

Alternate clients, debug modes, optional prize viewers, stale-offer acceptance, or server paths that charge on preview would collapse the distinction from Torch and the AG machine opinions. Casino-style presentation without the enforced accept/decline sequence is the fact pattern Tennessee has already treated as a gambling device.

Tenn. Code Ann. § 39-17-503Engineering ≠ statutory permission
Required analysis

Has this exact model been tested in Tennessee?

We did not identify a reported appellate decision in Tennessee directly testing this complete transaction architecture—mandatory pre-reveal, exact monetary disclosure before financial commitment, genuine accept/decline with no charge on decline, no post-acceptance randomness, finite predetermined pool, predetermined reels, software-enforced safeguards, and cent-level redemption.

What Tennessee courts and agencies have addressed—and how those systems differ

  • Torch Electronics, LLC v. Mulroy, Shelby County Chancery Court No. CH-24-0985 (final order July 14, 2025) — Three-judge panel (Chancellor JoeDae Jenkins; Judges Gary McKenzie and Deborah Stevens). Torch sought a declaration that its “No Chance Games” were not gambling devices, or that §§ 39-17-501 et seq. are unconstitutionally vague. The court held the machines are illegal gambling devices and upheld the statutes. Appeal pending in the Tennessee Court of Appeals. Closely analogous on predetermined electronic prize cabinets marketed as eliminating chance, and on a prize-viewer feature described in other Torch proceedings. Materially distinguishable to the extent NCG’s reveal is mandatory, the exact cost and result are disclosed before any charge for that offer, and decline costs nothing. Not appellate precedent and not a test of this complete architecture. Do not confuse Torch’s product name “No Chance Games” (NCGs) with this NCG Games brief.
  • State v. Burkhart, 58 S.W.3d 694 (Tenn. 2001) — Binding. Video slot cabinets with recorded credits, knock-off switches, and adjustable odds held to be gambling devices under §§ 39-17-501 and 39-17-505; statutes neither vague as applied nor overbroad. 1989 definitions intentionally broader than prior law. Partially analogous on electronic prize cabinets and device classification. Not applicable as a test of mandatory pre-reveal accept/decline.
  • Secretary of State v. St. Augustine Church/St. Augustine School, 766 S.W.2d 499 (Tenn. 1989) — Binding. Charitable bingo is a lottery under Article XI, Section 5; the General Assembly cannot authorize a lottery by redefining consideration as a charitable donation. Three elements: consideration, prize, and chance. Partially analogous on inability to label away an element. Materially distinguishable: bingo, not a pre-reveal cash terminal.
  • State ex rel. District Attorney General v. Crescent Amusement Co., 170 Tenn. 351, 95 S.W.2d 310 (1936); France v. State, 65 Tenn. 478 (1873) — Binding on the lottery definition used in St. Augustine Church. Partially analogous on chance as an element of a lottery. Not applicable to NCG architecture as such.
  • Op. Tenn. Att’y Gen. 02-089 (Aug. 20, 2002); 99-146 (July 30, 1999); 05-068 (May 3, 2005) — Pay-then-reveal vending/scratch and collector-card video machines treated as illegal lotteries and gambling devices; a proposed “promotional contest” statute that would have treated accumulated credits as non-consideration was called constitutionally suspect. AG opinions are not binding precedent. Partially analogous on objective analysis of consideration. Materially distinguishable from mandatory pre-reveal with no charge on decline.
  • Attorney General press release PR25-61 (Dec. 29, 2025) — Cease-and-desist letters to nearly forty online sweepstakes casinos; office described dual-currency redeemable-currency models as illegal lotteries under the Constitution and as gambling and consumer-protection violations. Enforcement, not a judicial test of NCG architecture.
  • Public Chapter 1117 (HB 1885 / SB 2136), effective May 27, 2026 — Adds Tenn. Code Ann. §§ 47-18-5901–5903: gambling, possession/operation of gambling devices, and commercial promotion of “online sweepstakes games” and other online or app-based gambling are unfair or deceptive acts under the Tennessee Consumer Protection Act. Sports wagering, fantasy sports, nonprofit annual events, and the education lottery are carved out. Not a judicial test of NCG architecture; relevant to current civil exposure and legislative intent.
  • Pre-1989 pinball cases (Smith Amusement Co. v. Mayor of Chattanooga, 205 Tenn. 712, 330 S.W.2d 303 (1959); City of Bartlett v. Hoover, 571 S.W.2d 291 (Tenn. 1978); State v. Ashley, 532 S.W.2d 289 (Tenn. Crim. App. 1975)) — Decided under express statutory pinball exclusions later superseded. Not applicable to current cash-prize terminals; cited only to show the old amusement path is historical.

Enforcement and regulatory activity (not judicial approval)

Shelby County’s district attorney has conducted multi-year machine seizures (“Operation Casino Royale” and later raids) and obtained the Torch order. The Attorney General’s 2025 sweepstakes campaign and Public Chapter 1117 expand civil investigative tools. The Sports Wagering Council’s investigative authority over illegal gaming was expanded in the same 2026 act. The Department of Revenue administers amusement-machine tax but will not opine that a taxed machine is lawful. We did not identify an Attorney General opinion approving mandatory pre-reveal, accept/decline, cash-redemption terminals. Absence of a decision testing this complete architecture is not a judicial determination of legality.

Critical distinction

“No reported Tennessee appellate decision directly testing this architecture” is materially different from “A Tennessee court has ruled this architecture legal.” Neither statement has been found true here. Torch is the closest analogue—and it is adverse at the trial level on predetermined “no chance” cabinets.

No direct Tennessee appellate precedent identified
Strongest contrary arguments

What Tennessee prosecutors and the Attorney General could argue.

1. “To any degree contingent on chance” is enough

Even if each accepted transaction’s result is fixed, prosecutors may argue chance exists as to which offer appears next, or across the session. The statute does not require predominance. Residual uncertainty can be “any degree.”

2. Torch already involved predetermination and a prize viewer

A three-judge panel held machines branded “No Chance Games” to be illegal gambling devices. Counsel must explain—with facts, not labels—why mandatory disclosure before any charge for that offer, and a free decline, are legally different from Torch’s insert-then-view sequence. The order is on appeal; until reversed it is the working trial-court answer in Shelby County.

3. Article XI, Section 5 is a constitutional lock

If a fact-finder finds consideration, prize, and chance, the activity is a lottery the Legislature cannot authorize except as an education lottery or a qualifying annual event. St. Augustine Church closed the “redefine consideration” path. A statutory amendment labeling NCG a “lawful business transaction” would face the same constitutional problem Opinion 05-068 described.

4. The casino-game clause and Burkhart devices

§ 39-17-501(2) reaches “any games of chance associated with casinos, including … slot machines,” in addition to the any-degree test. Burkhart held video slot cabinets with recorded credits are gambling devices and that the statutes give fair notice. Presentation that resembles slots will invite that clause.

5. Promotion, devices, lottery, and new civil remedies

Gambling: Class C misdemeanor (§ 39-17-502). Promotion: Class B misdemeanor (§ 39-17-503). Aggravated promotion of a gambling enterprise: Class E felony (§ 39-17-504). Device possession: Class B misdemeanor plus forfeiture (§ 39-17-505). Making a lottery: up to a Class E felony if $10,000 or more is involved (§ 39-17-506). Public Chapter 1117 adds Consumer Protection Act exposure for devices and online sweepstakes, including premises owners who permit devices.

6. Session-wide staking and credit balances

Money inserted upfront creates a continuing credit balance. Each Accept may be characterized as risking that balance across a session—the structure the AG opinions treated as paying for chances, not inspecting disclosed sales.

7. Current AG, DA, and legislative posture

The December 2025 sweepstakes cease-and-desist campaign, the July 2025 Torch order, Shelby County machine raids, and the May 2026 consumer-protection statute show active hostility to cash-prize cabinets and “sweepstakes” branding. Name collision with Torch’s “NCG” product line is an enforcement risk independent of backend logic.

NCG factual responses and residual risk

Responses: at acceptance the monetary result is fixed and known; declines cost nothing; no post-acceptance RNG; Torch is not appellate and involved payment onto the machine before the viewer; AG opinions are not holdings; amusement tax and sports-wagering licenses are not the NCG theory—the timing of § 39-17-501(2) “return” and of lottery “chances” is. Residual risk: any-degree chance, constitutional lottery lock, trial-level Torch order, Burkhart device law, AG and DA enforcement, and Public Chapter 1117 remain material pending Tennessee counsel review. The timing distinction is supportable; it is not settled, and the surrounding law is adverse.

TorchAdverse authority must be addressed, not dismissed
Complete transaction analysis

Chronology: when is the player financially committed?

“The player accepts or declines a fully disclosed, predetermined transaction. No later random event alters the monetary result. The legal question is whether Tennessee treats that sequence as risking value for a profit whose return is to any degree contingent on chance under § 39-17-501(2)—or as selling chances on a prize under Article XI, Section 5—or as something materially different from Torch’s predetermined ‘No Chance Games.’”

This is the position to test—not a Tennessee legal conclusion. Compare to Torch (predetermined pool; prize viewer after a balance is on the machine; held a gambling device at trial) and to AG Opinions 02-089 and 99-146 (pay first, then reveal a chance prize).

  1. 1 / POOLFinite pool predetermined
  2. 2 / REQUESTPlayer requests next offer
  3. 3 / REVEALExact result disclosed
  4. 4 / TERMSCost and result both known
  5. 5 / CHOICEAccept or decline
  6. 6 / SETTLENo post-accept RNG
  7. 7 / EXITRedeem remaining cents
Authorities

Primary Tennessee sources.

Verified . Binding precedent and statutes distinguished from trial orders, attorney-general opinions, and enforcement releases.

  1. [1]
    Tennessee statute · definitions

    Tenn. Code Ann. § 39-17-501 ↗

    Gambling as risking value for a profit whose return is to any degree contingent on chance, or casino-style games including slot machines (paragraph 2); lottery as selling value for chances on a prize (paragraph 6); gambling device (paragraph 4); listed exceptions (2)(A)–(F). Older AG opinions cited gambling as paragraph 1 and lottery as paragraph 5 before antique-machine and sports-pool subdivisions were inserted. Official compilation via Lexis/FindLaw reprint of Tenn. Code Ann.

  2. [2]
    Tennessee Constitution · binding

    Tenn. Const. art. XI, § 5 ↗

    Legislature shall have no power to authorize lotteries except the education lottery and two-thirds-approved 501(c)(3)/(c)(19) annual events. The 2002 amendment “does not authorize games of chance associated with casinos, including, but not limited to, slot machines, roulette wheels, and the like.” Official Secretary of State constitution page; section text also at Justia ↗.

  3. [3]
    Tennessee Supreme Court · binding

    St. Augustine Church, 766 S.W.2d 499 ↗

    (Tenn. 1989). Charitable bingo is a lottery; consideration, prize, and chance; General Assembly cannot authorize a lottery by redefining consideration. Quotes France v. State, 65 Tenn. 478 (1873), and Crescent Amusement, 170 Tenn. 351, 95 S.W.2d 310 (1936).

  4. [4]
    Shelby County Chancery Court · trial order / on appeal

    Torch Electronics v. Mulroy, CH-24-0985 ↗

    Final order July 14, 2025. Three-judge panel held Torch “No Chance Games” are illegal gambling devices; vagueness challenge rejected. Appeal pending. AOC special-case page; DA summary at scdag.com ↗. Not appellate precedent.

  5. [5]
    Tennessee statute · devices and amusement tax

    Tenn. Code Ann. § 39-17-505 ↗

    Possession of a gambling device or record is a Class B misdemeanor; devices are contraband subject to chapter 11, part 7 forfeiture. See also § 67-4-2203 ↗ and Revenue GEN-36 ↗ (tax payment does not legalize gambling).

  6. [6]
    Tennessee Attorney General · opinion / not precedent

    Op. Tenn. Att’y Gen. 02-089 ↗

    (Aug. 20, 2002). Pay-then-reveal prepaid-card-plus-scratch machine is an illegal lottery and gambling; the machine is a gambling device. See also Op. 99-146 (collector-card video machines) and Op. 05-068 ↗ (promotional-contest bill constitutionally suspect under art. XI, § 5).

  7. [7]
    Tennessee Supreme Court · binding

    State v. Burkhart, 58 S.W.3d 694 ↗

    (Tenn. 2001). §§ 39-17-501 and 39-17-505 not vague as applied to video slot cabinets with recorded credits; 1989 definitions intentionally broader than prior amusement-replay law.

  8. [8]
    Tennessee statute · promotion

    Tenn. Code Ann. § 39-17-503 ↗

    Gambling promotion—Class B misdemeanor—for knowingly inducing or aiding another to gamble while deriving an economic benefit other than personal winnings, or participating with a house edge other than skill or luck.

  9. [9]
    Tennessee statute · gambling

    Tenn. Code Ann. § 39-17-502 ↗

    Knowingly engaging in gambling is a Class C misdemeanor. Narrow affirmative defense for good-faith reliance on representations that an activity was an authorized Title 3 annual event.

  10. [10]
    Tennessee statute · aggravated promotion

    Tenn. Code Ann. § 39-17-504 ↗

    Aggravated gambling promotion—Class E felony—for knowingly investing in, financing, owning, controlling, supervising, managing, or participating in a gambling enterprise (two or more persons regularly engaged in gambling promotion).

  11. [11]
    Tennessee statute · lottery

    Tenn. Code Ann. § 39-17-506 ↗

    Knowingly making or aiding in making a lottery. Education lottery and authorized annual events excepted. Penalty scales from Class C misdemeanor to Class E felony if $10,000 or more is involved.

  12. [12]
    Tennessee statute · 2026 consumer protection

    Public Chapter 1117 (2026) ↗

    HB 1885 / SB 2136, effective May 27, 2026. Adds Tenn. Code Ann. §§ 47-18-5901–5903: gambling, gambling devices, and commercial promotion of online sweepstakes games and other online or app-based gambling are unfair or deceptive acts under the Tennessee Consumer Protection Act. Bill history: HB 1885 ↗.

  13. [13]
    Tennessee Attorney General · enforcement

    AG PR25-61, online sweepstakes casinos ↗

    (Dec. 29, 2025). Cease-and-desist letters to nearly forty online sweepstakes casinos; dual-currency redeemable-currency model described as an illegal lottery and a gambling and consumer-protection violation. Enforcement, not a judicial holding.

  14. [14]
    Tennessee statutes · authorized exceptions

    Tennessee Sports Gaming Act, title 4, ch. 49 ↗

    Licensed sports wagering excluded from § 39-17-501(2). See also Fantasy Sports Act (title 4, chapter 49, part 2); education lottery (title 4, chapter 51); nonprofit annual events (title 3, chapter 17).

Disclaimer: This brief is research and issue-spotting for professional discussion—not legal advice, Sports Wagering Council approval, Education Lottery authorization, or permission to operate. No Tennessee Attorney General opinion specifically addressing mandatory pre-reveal NCG architecture was identified. Torch is a trial-court order on appeal and is not appellate precedent. Tennessee counsel should verify all citations, effective dates, local enforcement practices, lottery exclusivity questions, and the actual deployed software before any compliance representation.