From 
http://www.thefrisky.com/2013-12-09/...-accusations/:
After only three weeks in existence, the Snuggle House in Madison,  Wisconsin, where cuddling professionals hugged, spooned and cuddled  their clients for $60 an hour, has shut down. The cuddling business was  accused of being a front for prostitution, a lawyer for the Snuggle  House owner confirmed to the AP today. A comment on the business’  Facebook page confirmed, “The pushback and harassment is not worth it,  honestly.”
Paying for sex, nudity, drugs and alcohol were forbidden during  snuggling sessions. Customers signed a two-page waiver before a session  began and security cameras and panic buttons were located in each  bedroom. However, attorneys for the city of Madison were were skeptical  of “therapeutic cuddling” and had delayed its opening several times.
 
According to 
The Times-Picayune, prior to the closing, the  city had planned to draft an ordinance to regulate snuggling even  further. City attorneys claimed they want to protect the cuddling  professionals — three women and one man — from sexual assault. While  safety is surely a worthy cause (and one that the cameras, panic buttons  and waivers suggest the Snuggle House were aware of), the city’s  explanation for their concern left something to be desired. According to  one city attorney, cuddling leads to sex, 
always, ergo the employees must be getting sexually assaulted if they are not actually prostitutes.
 
This is Madison assistant city attorney Jennifer Zilavy, as quotes in the 
Times-Picayune:
 ”There’s no way that (sexual assault) will not happen. No offense to men, but I don’t know any man who wants to just snuggle.”
Er, what? 
Of course there are men who want to just snuggle.  Cuddling is affectionate touching. We cuddle with family and friends.  Depending on your relationship with your cuddling partner, cuddling can  also be sexual when it involves more intimate types of touch. All men  are not potential rapists and it’s insulting to assume that straight men  only want to use women’s bodies for sexual release. It’s a fallacy to  say 
all cuddling is sexual.  In fact, I suspect actual,  honest-to-goodness sex workers have some clients who just want to come  and snuggle with a woman. That’s a fairly good explanation for why  snuggling businesses like Cuddle Party in Alabama, Cuddle Therapy in San  Francisco, 
The Snuggery in Rochester, New York,  and Be The Love You Are in Boulder, Colorado continue to exist.  Clearly, there is a demand for, as Snuggle House lawyer Tim Casper put  it, “nonsexual touching.”
 
Casper said the Snuggle House’s owner believes that cuddling relieves  stress. Indeed, a woman who described her cuddling experience with  Lonnie, the male professional snuggler at the Snuggle House, described  it as “partially like yoga and partially like accidentally falling  asleep with a friend, waking up, and wondering if it’ll be awkward. It’s  strange but no unpleasant.” She lay with Lonnie, listening to soft  music playing, and described the experience as ultimately very relaxing.
 
Alas, the Snuggle House is no more.  They are now offering to donate  their furniture, like beds and lighting, to local religious  organizations. Their Facebook page  reads: “The Snuggle House is  Officially Closed — for good. For those people who supported us, thank  you. Snuggle on!” RIP, Snuggle House. We hardly knew you.