Tennessee has finalized its prohibition on sweepstakes casinos after Governor Bill Lee signed HB 1885/SB 2136 into law at the end of his review period. The legislation establishes a statewide ban on online gaming models built around virtual-currency systems used to simulate gambling.
The measure followed a full legislative process, with approval in both chambers on April 23 after a 69-17 House vote and a conference committee compromise. It was sent to the governor on May 11, leaving him 10 days, excluding Sundays, to act. He signed the bill into law.
The law targets online sweepstakes platforms using virtual, dual, or multi-currency systems that replicate gambling formats, including bingo, lottery-style games, slot machines, table games, unlicensed sports wagering, and video poker.
State Aligns With Wider Sweepstake Bans
With the law in force, Tennessee joins California, Connecticut, Louisiana, Montana, New Jersey, and New York in restricting sweepstakes casino operations. Lawmakers linked the policy to concerns over virtual currency systems in gambling-style digital products.
A conference committee report stated that “… online sweepstakes casinos generally utilize a system allowing players to play casino-style games with virtual currency and exchange the virtual currency for cash or other real-world prizes … in reality, such online sweepstakes casinos and other online-gambling platforms serve as a façade to hide the fact that players may engage in real-money gambling through the purchase and use of virtual currency.”
Enforcement falls under the Tennessee Consumer Protection Act of 1977. The bill also expands regulatory authority for investigation and enforcement of violations.
Enforcement Pressure Preceded Legislation
Before the law passed, Tennessee Attorney General Jonathan Skrmetti issued cease-and-desist letters to sweepstakes casino operators in late 2025, prompting several exits from the market.
Operators included Chumba Casino, Fortune Coins, Global Poker, Hello Millions, High 5 Casino, Legendz, Luckyland, McLuck, Modo, Sportzino, Stake, WOW Vegas, Yay Casino, and Zula Casino.
In a December statement, Skrmetti said: “The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money.
“They work hard to make these sweepstakes casinos look legitimate, but at the end of the day they are not. They avoid any oversight that could ensure honesty or fairness. Our Office was glad to chase these shady operations out of Tennessee and will keep working to protect Tennesseans from illegal gambling.”
The release later continued, “Our Office was glad to chase these shady operations out of Tennessee and will keep working to protect Tennesseans from illegal gambling. Other sweepstakes casinos currently operating in Tennessee or contemplating entering the Tennessee marketplace should consider themselves on notice that illegal gambling will not be tolerated,.”
Separate Legal Dispute With Kalshi Ongoing
Tennessee is also involved in a separate dispute with prediction market operator Kalshi.
A federal court granted Kalshi a preliminary injunction on February 20 after it challenged state cease-and-desist orders over sports event contracts. Kalshi argues those contracts fall under federal jurisdiction of the Commodity Futures Trading Commission.
Source:
“Tennessee sweepstakes casino ban signed into law by Gov. Lee”, sbcamericas.com, May 22, 2026
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