Tennessee lawmakers are advancing legislation to prohibit online sweepstakes casinos after the Senate Commerce and Labor Committee approved Senate Bill 2136 with an 8-0 vote. The measure now moves to the full Senate, while a companion House bill awaits consideration in a subcommittee.
Sponsored by Senate Speaker Pro Tempore Ferrell Haile, SB 2136 seeks to classify certain sweepstakes-style gaming models as illegal gambling under state law, particularly platforms using dual-currency systems where virtual coins or tokens can be purchased, received through promotions, or obtained for free, then exchanged for prizes or cash equivalents.
“This bill clarifies definitions related to casino-style games and sweepstakes,” Haile said during the committee hearing. “[SB 2136] shuts down perceived loopholes being exploited by illegal gambling operators and it authorizes the attorney general to seek civil injunctions against operators who are already criminally prohibited but not clearly subject to civil enforcement.”
What Games Would Be Prohibited
SB 2136 defines prohibited online sweepstakes as contests, games, or promotions conducted online or through computer terminals that use virtual-currency systems. Haile noted that the bill does not affect legal sports betting, fantasy sports, the Tennessee Education Lottery, or authorized non-profit gaming events.
The legislation also targets operators that allow underage or self-excluded players to participate. Violations of the Tennessee Consumer Protection Act of 1977 could result in civil penalties ranging from $5,000 to $15,000 per violation.
“This bill closes existing enforcement gaps by granting the attorney general clear civil enforcement authority to take action against illegal operators and strengthening consumer protections,” Haile said.
Enforcement Powers and Investigations
SB 2136 grants the Attorney General and Reporter authority to request information from anyone suspected of operating or promoting illegal sweepstakes platforms. Individuals under investigation must submit reports under oath, with all documents treated confidentially. Intentionally evading requests can incur civil penalties up to $1,000 per document.
The bill was introduced after Tennessee Attorney General Jonathan Skrmetti sent cease-and-desist letters to nearly 40 online sweepstakes casinos. In December, his office announced it had “successfully halted” the operations of 38 platforms, including Chumba Casino, Global Poker, and High 5 Casino. The Tennessee Sports Wagering Council also issued warnings to unlicensed sports betting sites such as BetOnline, Bovada, and Sportzino, prompting their exit from the state.
Tennessee Joins Broader National Effort
Haile cited consultations with the Attorney General’s office and the Sports Wagering Council in drafting SB 2136, emphasizing concerns about platforms operating without age verification, oversight, or safeguards for self-excluded players. Free-to-play games without real-money exchange remain lawful.
Tennessee’s approach reflects a nationwide reassessment of dual-currency sweepstakes models. In 2025, California, New York, New Jersey, Connecticut, and Montana passed measures addressing similar casinos, while other regulators have used cease-and-desist actions. Policymakers have raised concerns that such platforms bypass licensing systems, potentially weakening consumer protections and regulatory oversight.
Source:
“Tennessee bill to ban dual-currency sweeps heads to Senate floor”, sbcamericas.com, February 25, 2026
The post Tennessee Advances Bill to Ban Online Sweepstakes first appeared on RealMoneyAction.com.