Governor Bill Lee of Tennessee finalized a legislative move by signing into law a measure that bans sweepstakes casinos in the state. This development occurred on Friday, which was the final day for the governor to take action. The approval follows the swift passage of HB 1885/SB 2136 by the state legislature before the session concluded on April 23. The law was then forwarded to the governor on May 11, marking the beginning of a ten-day period, excluding Sundays, for him to endorse or veto the legislation. The prohibition has been assessed to have no impact on state revenues, according to prior reviews by governmental staff.
The newly enacted statute targets sweepstakes casinos, a particular business model wherein operators provide players two forms of virtual currency. One can be purchased by the players, while the other is distributed freely through promotions or in conjunction with purchases. These currencies are utilized in casino-like games, with the potential for winnings to be exchanged for cash. Previously marketed as legal under the guise of sweepstakes, these operations are now explicitly outlawed in Tennessee under SB 2136. The ban encompasses simulations of slots, video poker, table games, bingo, and unauthorized sports betting. Notably, the legislation does not impact legal sports betting, fantasy sports, the Tennessee Education Lottery, nonprofit gaming, or free-to-play games.
Tennessee aligns with an increasing number of states that are taking measures against sweepstakes casinos. Eight other states, including California, New Jersey, and New York, have already enacted similar bans, with Montana being the pioneer in passing such legislation last year. Furthermore, in states like Illinois and Minnesota, attorneys general have employed existing consumer protection and gambling laws to issue cease-and-desist orders against operators in this sector.
The initiation of Tennessee’s ban on sweepstakes casinos can be traced back to late 2025 when Attorney General Jonathan Skrmetti issued cease-and-desist notices to various operators within the state, compelling many to cease operations or relocate. Companies such as Chumba Casino, Global Poker, Blazesoft, Luckyland, and Stake were specifically targeted. At that time, Skrmetti criticized these platforms, asserting that they exploit consumers by giving the false appearance of legality while evading oversight mechanisms that ensure integrity and fairness. His office expressed satisfaction in curtailing these operations in Tennessee and reaffirmed its commitment to defending residents from illegal gambling activities.
Following the exodus of several operators, state lawmakers continued to push for a permanent legislative solution. The legislative process culminated in 2026 with a compromise from a conference committee, which received approval from both legislative chambers. The House of Representatives passed the measure decisively with a vote of 69-17. In its justification, the committee characterized sweepstakes casinos as entities that disguise real-money gambling opportunities through the use of virtual currency.
Looking forward, the implementation of this law is set to reinforce Tennessee’s regulatory framework concerning gambling, effectively sealing any loopholes previously exploited by sweepstakes casinos. The state’s regulatory authorities will likely focus on ensuring compliance with the new law, monitoring any attempts to circumvent the ban, and potentially preparing for any legal challenges that may arise. This legislative action could prompt other states to review their own stances on sweepstakes casinos, possibly influencing further legal developments in the broader gambling market.
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