The Senates in Tennessee and Oklahoma have recently approved legislation aimed at dual-currency sweepstakes casinos, accelerating a growing trend of state-level efforts to regulate unlicensed online gaming platforms.
Tennessee Moves Against Online Sweepstakes
In Tennessee, Senate Bill 2136 introduces provisions under the Tennessee Consumer Protection Act to define “online sweepstakes games” as digital gambling systems in which players can: “Utilizes a virtual-currency system allowing a player to… Exchange the currency for a prize, award, cash, or cash equivalent, or the chance to win a prize, award, cash, or cash equivalent.”
The law further states: “Gambling; the operation or possession of gambling devices; and the operation, conducting, or commercial promoting of online sweepstakes games and other forms of online or app-based gambling are unlawful and are offenses against the public health, safety, and welfare of this state.”
Violations fall under unfair or deceptive acts, providing the attorney general with authority to investigate illegal gambling activity. Tennessee Attorney General Jonathan Skrmetti previously issued cease-and-desist letters to nearly 40 online sweepstakes operators in December 2025, prompting several major platforms to withdraw from the state.
SB 2136 will advance to the House, where a companion measure, HB 1885, may be incorporated into the Senate version. If signed, the law would take effect immediately.
Oklahoma Expands Criminal Gambling Definition
Oklahoma’s Senate Bill 1589 broadens the state gambling statute to include online casino-style games. The bill defines “online casino games” as: “Any gambling game that allows a person to access the Internet… that, upon risking any representative of value, simulates any gambling game described in this section or any other form of gambling, including… a slot machine…”
It clarifies that “representative of value” encompasses any currency used in dual-currency systems exchangeable for prizes or cash. SB 1589 extends liability to operators, geolocation providers, platform suppliers, promoters, and affiliates. Violations are treated as Class C2 felonies, with fines of $500 to $2,000 and potential imprisonment.
The measure now proceeds to the House, where HB 4130, a similar bill, has passed two committees. SB 1589 would take effect on November 1, 2026, if enacted.
Growing Multi-State Enforcement
Tennessee and Oklahoma are part of a broader crackdown on sweepstakes casinos across the United States. Indiana’s HB 1052 explicitly bans dual-currency models and awaits the governor’s signature. The Mississippi Senate passed a similar ban, though it is stalled in the House.
Iowa has strengthened the authority of the Iowa Racing & Gaming Commission to pursue illegal sweepstakes operators. Utah expanded enforcement powers under criminal and consumer protection laws, creating a potential pathway to target sweepstakes casinos.
Virginia has two separate online casino bills, with provisions restricting sweepstakes casinos, advancing through opposite chambers and potentially becoming law in 2028. Other states, including Maine, Florida, Maryland, Louisiana, New York, and Illinois, are also considering measures aimed at regulating unlicensed dual-currency operators.
As legislation clarifies that sweepstakes models fall under existing gambling and consumer protection laws, unregulated operators face growing enforcement pressure heading into the 2026 legislative cycle.
Source:
“Tennessee and Oklahoma Senates Pass Bills Targeting Sweepstakes Casinos”, gamblinginsider.com, March 3, 2026
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