Tennessee Officially Bans Sweepstakes Casinos

Key Highlights

Tennessee has officially joined the expanding list of US states taking action against sweepstakes casinos after Gov. Bill Lee signed HB 1885/SB 2136 into law on May 22. 

The bill was approved with amendments during the final day of Tennessee’s legislative session in April and sent to Lee’s desk on May 11. Under Tennessee law, the governor had 10 days, excluding Sundays, to either sign, veto, or allow the measure to become law without a signature. Lee approved the legislation on the 10th day.

What the New Tennessee Law Prohibits

The new law bans any online sweepstakes game using virtual-currency, dual-currency, or multi-currency systems that replicate gambling-style experiences. The legislation specifically references slot machines, table games, bingo, lottery games, video poker, and unlicensed sports wagering.

Lawmakers designed the bill to target sweepstakes casino operators that allow players to use promotional currencies that are redeemable for prizes or their cash equivalents. Violations will now fall under the Tennessee Consumer Protection Act of 1977, giving regulators and the attorney general additional enforcement authority.

The legislation also includes immediate effect language, meaning operators do not receive a transition or wind-down period. Several major sweepstakes brands, including Fortune Coins and Luckyland, have already exited the Tennessee market after Attorney General Jonathan Skrmetti issued cease-and-desist letters in late 2025.

The bill received bipartisan support, passing in the Senate 32-0 before passing the House by a vote of 69-17.

Industry Pressure Against Sweepstakes Continues To Grow

The seventh state to ban sweepstakes casinos, Tennessee’s decision increases momentum for the nationwide regulatory crackdown. Lawmakers across the US are increasingly drawing distinctions between regulated online gaming operators and sweepstakes-based products operating in legal gray areas.

The Tennessee measure was strongly supported by state regulators and the attorney general’s office, which argued that sweepstakes casinos function as unregulated gambling products despite promotional marketing language.

More States Could Follow Tennessee’s Lead

The ban may further intensify pressure on sweepstakes operators nationwide as additional states continue reviewing similar legislation. Several lawmakers across the country, including in Minnesota and Maryland, have introduced bills aimed at restricting dual-currency gaming systems and casino-style promotional platforms.

While Tennessee’s gambling laws allow regulated online sports betting, the state still does not authorize traditional online casino gaming. The new law reinforces the state’s position that casino-style gambling must remain within licensed and regulated channels.

The growing wave of enforcement actions and legislative bans could force more sweepstakes operators to reconsider market access strategies in states where regulators view the model as unlawful gambling activity.