Tennessee Pushing to Ban Sweepstakes Casinos

Tennessee is set to follow in the footsteps of California and other states by officially outlawing popular sweepstakes casinos. Senate Bill 2136, sponsored by Sen. Ferrell Haile, would classify these casinos as unlawful gambling sites based on the “Sweeps Coins” models they use, which allow players to redeem virtual coins for real cash prizes. If the bill is successfully passed into law, it would be yet another devastating blow for one of iGaming’s fastest growing markets. 

Tennessee Advances Anti-Sweepstakes Casino Bill, But a Delay Has Happened 

Back in March, SB 2136 passed the Tennessee Senate unanimously and moved to the House for consideration. A companion measure, House Bill 1885, introduced by Rep. Scott Cepicky and Rep. Clay Doggett, also passed through committee stages but has since been sidelined. It ultimately comes down to SB 2136, which aims to completely ban online sweepstakes casino games that utilize “a virtual-currency, dual currency, or multi-currency system” that allows players to “exchange the currency for a prize, award, cash, or cash equivalent.” 

Any existing sweepstakes casino or similar gaming site following this prize-winning model in Tennessee would have criminal penalties imposed on them. However, despite nearing its final passage, Tennessee’s proposed anti-sweepstakes bill was temporarily delayed in April due to end-of-session procedural delays and is still awaiting an official signature from Gov. Bill Lee, who will have the final say on whether the bill is passed into law. 

In response to the potential ban, expert analyst Alex Windsor from SweepsLounge.com, which provides detailed player guides of the leading sweepstakes casinos, says that sweepstakes casinos “follow a completely legal sweepstakes model that gives players the chance to play casino-style games for free” and are “a much safer alternative to regular online casinos.” 

It’s expected that the bill will be signed over the coming days in May without further amendments, especially considering how strong Tenneesse’s earlier crackdown on sweepstakes casinos was. 

Almost 40 Sweepstakes Casinos Have Already Left Tennessee 

At the start of the year, Tennessee Attorney General Jonathan Skrmetti announced that his office has shut down close to 40 “illegal online sweepstakes casinos” after hitting them with cease-and-desist letters, which the operators complied with. In a statement, Skrmetti accused sweepstakes casinos of being designed to “take your money” and “avoid any oversight that could ensure honesty or fairness.” 

The shared belief among Tennessee lawmakers here is that sweepstakes casinos intentionally use a dual-currency virtual coins system as a façade and that it’s simply a legal loophole designed for these sites to exploit players and avoid traditional online gambling laws that regular online casinos have to abide by. 

The sweepstakes operators who received these cease-and-desist letters included Chumba Casino and Stake.us, both of which have attracted millions of U.S. players over recent years. And now that there’s practically been a sweepstakes exodus throughout Tennessee, the purpose of SB 2136 is to close any remaining legal loopholes and permanently shut the door on the prospect of a return to the state for any of these sites. 

Indiana and Maine Have Become the First States to Ban Sweepstakes Casinos in 2026 

If Tennessee outlaws sweepstakes casinos, it would become the third state to do so this year. Already, both Indiana and Maine have passed their anti-sweepstakes casino legislation into law this year. With Indiana, the Social Gaming Leadership Alliance (SGLA), fronted by VGW and other big sweepstakes casino operators, actually attempted to cut a tax revenue deal with them worth upwards of $20 million, but the state ultimately declined. Maryland, Minnesota and a small number of other states are also currently pushing to ban sweepstakes casinos as well. 

If more anti-sweepstakes casinos bills do get passed into law over this summer, it would be a repeat of 2025, which saw a wave of states ban sweepstakes casinos in quick succession, including California, New York, New Jersey and others. As it stands, sweepstakes casinos are now legal in around 40 states following recent bans and restrictions, whereas pre-2025 they were legally accessible in close to every state. It’s been crushing for the sweepstakes casino market, which is now projected to only generate $3.6 billion revenue in the U.S. throughout 2026, down over a billion from the previous year. 

What’s Next for Sweepstakes Casinos? 

The overwhelming expectation is that Senate Bill 2136 will be passed into law over the coming month, which will lead to sweepstakes casinos losing significant revenue and players from Tennessee. Further bans from the likes of Maryland would also signify that the U.S. country-wide crackdown on these casinos isn’t going to slow down anytime soon. There’s potential for sweepstakes casinos to effectively be banned in close to half of America’s states this time next year if bans continue in their current direction. 

The slight glimmer of hope for sweepstakes operators, though, is that state lawmakers across the country have recently had to turn their attention to “prediction market” sites, which have proven to be even more legally controversial than their sweepstakes counterparts. 

But there’s no doubt here that sweepstakes casinos remain in serious legal trouble throughout the U.S., and these casinos will perhaps have no option but to adapt their existing “sweepstakes” models to avoid further bans and lawsuits.

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