Tennessee Governor Bill Lee signed SB 2136 / HB 1885 into law on May 22, 2026, officially banning online sweepstakes casinos and significantly expanding enforcement powers against operators using virtual currencies, dual-currency systems or promotional credits redeemable for cash or prizes. The central point of the legislation is that Tennessee now considers it illegal to operate, promote, or facilitate or support online platforms or mobile apps simulating slots, blackjack, roulette, video poker, bingo or unlicensed sports betting through digital coins or promotional systems.
- Tennessee bans sweepstakes, locks down legal market
The measure was pushed by State Senator Ferrell Haile and Representative Scott Cepicky alongside a broader enforcement campaign led by Tennessee Attorney General Jonathan Skrmetti, who had already issued cease-and-desist letters in December 2025 against nearly 40 sweepstakes operators, including Chumba Casino, Stake, Global Poker, WOW Vegas and Luckyland, accusing them of disguising illegal gambling through promotional gaming models.
Tennessee Attorney General Jonathan Skrmetti
The bill moved quickly through the legislature with overwhelming support. The Senate approved SB 2136 on March 2, 2026, by a 32-0 vote after adopting amendments expanding the definition of “online sweepstakes game” to include virtual-currency, dual-currency and multi-currency systems. The House subsequently proposed a study committee amendment, but the conference committee ultimately restored strict prohibitive language. On April 21, the House formally substituted HB 1885 with SB 2136 and passed the revised version by a 69-17 vote following additional amendments strengthening investigative and enforcement authority.
Mary Beth Thomas
The new law changes Tennessee’s previous framework under the Tennessee Sports Gaming Act, which allows regulated online sports betting but previously lacked an explicit prohibition against sweepstakes casinos. The legislation now classifies these operations as direct violations of the Tennessee Consumer Protection Act of 1977, enabling civil penalties, court injunctions, document seizures and broader enforcement actions. It also grants state investigators expanded authority to request records, sworn statements and evidence tied to illegal gambling operations.
Representative Scott Cepicky
The legal market remains centered around the Tennessee Sports Wagering Council, led by executive director Mary Beth Thomas. Tennessee does not operate commercial casinos and instead relies on regulated online sports betting, fantasy sports and the state lottery. In April 2026 alone, the state reported approximately US$480.8 million in sports betting handle and nearly US$8.9 million in privilege tax revenue, while the American Gaming Association estimated Tennessee’s 2025 sports betting GGR at roughly US$700 million.
The legislation places Tennessee at the forefront of the growing nationwide crackdown on sweepstakes casinos and is expected to trigger stronger banking restrictions, payment blocking measures, KYC/AML scrutiny and coordinated enforcement actions against offshore operators and dual-currency gaming models across the United States.
