Tennessee Prohibits Online Sweepstakes Casinos with New Legislation

(AsiaGameHub) –   Yet another U.S. state is saying “no” to sweepstakes. Thanks to Governor Bill Lee, who recently signed Senate Bill 2136 into law, Tennessee has now taken steps to shut down online sweepstakes casinos. 

This decision signals a distinct shift in how the Volunteer State addresses online gambling-style platforms.

Issues with the Dual-Currency System

The legislation—already passed by both chambers of the state legislature earlier this month—directly targets online services that use a dual-currency system to mimic casino gameplay. 

These platforms let players purchase one type of virtual currency while also providing a second currency for free via bonuses or promos. 

Users can then use either form of currency to play casino-style games, and most importantly, some winnings are redeemable for cash or cash equivalents.

Under the new law, however, this model is no longer permitted in Tennessee—meaning any operations running or promoting such platforms are acting illegally. 

The legislation specifically covers games that resemble slot machines, poker, table games, bingo, and unlicensed sports wagering. 

Conversely, the law does not impact legal gambling activities in the state, such as sports betting, fantasy sports, the Tennessee Education Lottery, nonprofit gaming, or free-to-play entertainment games.

Aligning with Nationwide Efforts

Tennessee is now part of a growing group of U.S. states that have moved to restrict or fully ban sweepstakes casino operations. 

States including New York, New Jersey, California, Connecticut, Indiana, Iowa, Maine, and Montana have introduced similar measures in recent years. In many cases, operators either voluntarily withdrew or ceased services following regulatory pressure.

Even before the new law was signed, Tennessee’s Attorney General had launched enforcement actions against multiple platforms, issuing cease and desist letters to dozens of operators. Many companies responded by shutting down their state services or exiting the market entirely.

Officials note the practical impact on most residents will be minimal, as many major sweepstakes casino brands had already left Tennessee ahead of the vote. 

Nevertheless, the law formalizes a stance the state has been moving toward for months and gives regulators stronger tools to act against remaining operators.

With SB 2136 now in effect, Tennessee has firmly shut the door on sweepstakes casino operations, aligning itself with a broader national push to regulate online gambling more strictly.