Tennessee Senate advances bill vs online sweepstakes casinos
Lawmakers in Tennessee have moved closer to banning online sweepstakes casinos after the Senate Commerce and Labour Committee unanimously approved Senate Bill 2136 in an 8-0 vote. vote. The measure now proceeds to the full Senate, with a companion bill awaiting consideration in the House of Representatives.
Sponsored by Senate Speaker Pro Tempore Ferrell Haile, the bill seeks to prohibit online sweepstakes games that operate through dual-currency systems. Haile’s proposal would classify certain sweepstakes-style gaming models as illegal gambling under state law, particularly where virtual currency can be purchased or obtained through promotions and later exchanged for prizes, cash or cash equivalents.
According to several media reports, the bill amends existing statutes to designate illegal gambling and related activity as violations of the Tennessee Consumer Protection Act. It also expands the authority of the state’s Sports Wagering Council and the Attorney General to investigate and pursue enforcement actions against operators.
The reports said that Haile has indicated that the measure was introduced following discussions with the Attorney General’s office and the Tennessee Sports Wagering Council, citing concerns about online platforms operating without age verification, oversight or safeguards for self-excluded individuals. The bill states that it does not affect legal online sports betting, fantasy sports, the state lottery or authorised non-profit gaming events. Free-to-play games that do not involve real-money exchange would also remain lawful.
The House companion measure, filed by State Representative Scott Cepicky, is scheduled for review in a lower chamber subcommittee in early March. If both chambers approve the legislation, it will head to the governor for consideration.
Cease-and-desist campaign shut down 38 operators
The legislative push follows enforcement action led by Jonathan Skrmetti, who in late December announced that dozens of online sweepstakes casino operators had either shut down or moved to comply after receiving cease-and-desist letters.
According to the Attorney General’s office, 38 platforms were targeted for allegedly offering unlawful gambling to Tennessee residents through dual-currency systems. These models typically involve one virtual currency distributed for free and another sold to players, with the latter redeemable for prizes or cash equivalents.
All recipients of the enforcement letters reportedly disabled sweepstakes-style components or agreed to wind down operations within a defined timeframe. The action followed earlier withdrawals from the state by several prominent brands.
Tennessee joins wider scrutiny of dual-currency model
Tennessee’s actions form part of a broader national reassessment of sweepstakes casino models. Lawmakers in several states are reviewing or advancing proposals aimed at clarifying the legal status of dual-currency gaming systems that resemble real-money wagering.
In 2025, states including California, New York, New Jersey, Connecticut and Montana approved measures addressing sweepstakes-style casinos. Elsewhere, regulators have pursued enforcement through cease-and-desist directives rather than new legislation.
Policymakers across the U.S. jurisdictions have raised concerns that sweepstakes platforms operate outside established licensing systems, potentially undermining consumer safeguards and regulatory consistency.
The fuse is lit in Mexico City. SiGMA North America hits Mexico City, 01–03 Sept 2026. 4,000 delegates. Three days of deals, insight, and startup sparks. The most serious stage of the Spanish-speaking sector. Lead from the front and book your spot.
