Tennessee is taking formal steps to stop the growth of online sweepstakes casinos. House Bill 1885, introduced by Rep. Scott Cepicky, aims to make clear that these platforms are illegal forms of gambling disguised as free-to-play entertainment.
The bill argues that such operations “serve as a façade to hide the fact that players may engage in real-money gambling through the purchase and use of virtual currency,” and that they “generally constitute illegal lotteries and violate Tennessee gambling and consumer protection laws.”
By explicitly defining these platforms, the state intends to give its attorney general broader power to investigate and take action against operators who exploit promotional sweepstakes to facilitate gambling.
Clarifying the Law on Sweepstakes Games
HB 1885 defines an “online sweepstakes game” to capture the mechanics behind dual-currency models.
It explains that these games: “Utilize a virtual-currency system allowing a player to… play or participate with a currency… that is directly purchased, received through a bonus or promotion, or received for free with the purchase of another type of currency,” and to “exchange the currency for a prize, award, cash, or cash equivalent.”
The law covers platforms that “simulate gambling of any kind, including, but not limited to, casino-style gaming such as slot machines, video poker, table games, lottery games, bingo, or unlicensed sports wagering.”
HB 1885 declares the operation, promotion, or support of these games illegal, extending accountability to partners, vendors, and other intermediaries. Violations are treated as unfair or deceptive acts under the Tennessee Consumer Protection Act, allowing for civil penalties and injunctions in addition to criminal enforcement.
Part of a Wider State-Level Trend
Tennessee’s move follows a broader national effort to tackle sweepstakes-style platforms in 2026. States that have recently introduced legislation or enforcement include Maine, Florida, Indiana, Mississippi, Maryland, Virginia, Oklahoma, Utah, and Iowa. Regulators are increasingly concerned that these dual-currency systems are being used to circumvent traditional gambling laws.
Enforcement Drives Platforms Out
Even before HB 1885 became official, enforcement activity was accelerating. Starting in November, over 30 platforms—including Chumba, Modo, High 5, Stake, and Pulsz—began exiting Tennessee. Industry observers noted that the Tennessee Sports Wagering Council or Attorney General Jonathan Skrmetti might be influencing these departures.
By the end of December, Skrmetti’s office issued cease-and-desist letters to nearly 40 online sweepstakes casinos. In a press release, he said his office had “successfully halted the operation of multiple illegal online sweepstakes casinos in Tennessee,” describing the dual-currency model as “a façade to hide the fact that participants may engage in real-money gambling.”
All companies that received letters either removed the sweepstakes components or agreed to cease operations in Tennessee entirely.
Utah’s Legislative Approach
Meanwhile, Utah advanced Senate Bill 38, strengthening consumer protections for prize promotions, ticket sales, and automatic renewal contracts. Though it does not mention sweepstakes casinos directly, the bill targets platforms using virtual currency, promotional credits, or dual-wallet systems to obscure real-money gambling. Its rapid passage highlights the growing reliance on consumer protection laws to address unregulated online gambling activities, rather than traditional gaming regulation.
The post Tennessee Strengthens Crackdown on Online Sweepstakes Casinos first appeared on RealMoneyAction.com.