Tennessee Governor Signs New Sweepstakes Casino Ban

^{A bill reclassifying social casino sites as gambling was signed by Tennessee Gov. Bill Lee last Friday.  (Photo: dpa / Alamy Live News)}

Tennessee Gov. Bill Lee signed a bill outlawing sweepstakes casinos in the state, becoming the latest state to place an explicit ban on the gaming sites. 

Gov. Lee signed Senate Bill 2136 into law on May 22, reclassifying dual-currency social casino sites as gambling rather than sweepstakes.

The law has been a long time coming, especially for Tennessee Attorney General Skrmetti, who had already begun his crackdown on sweepstakes casinos months before the regulations were passed. On December 29, 2025, he announced that he had sent cease-and-desist letters to nearly 40 online sweepstakes casinos, claiming they were operating illegally under Tennessee law.

Skrmetti Gets New Powers to Continue Sweepstakes Crackdown

SB 2136 passed the Tennessee Senate easily, with the chamber voting 32-0 in early March. Its companion bill, House Bill 1885, passed via a 69-17 margin in April. The new law took effect immediately following Lee’s signature.

Under the new law, Tennessee Attorney General Jonathan Skrmetti will gain significant enforcement authority over the sweepstakes industry under the purview of the state’s Consumer Protection Act.

“The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money,” Skrmetti said in a statement at the time. “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.”

Tennessee Joins Growing List of States with Sweepstakes Bans

Sweepstakes casinos primarily offer casino-style games with two different types of currency. The first is a “play money” option, often called Gold Coins, which players can purchase to play more, but has no redemption value. The sites also offer Sweeps Coins, which can’t be purchased directly but can be exchanged for cash or prizes.

Sweepstakes casino operators say this division is what classifies their sites as sweepstakes rather than gambling businesses. However, critics and regulators have pointed out that most purchases of Gold Coins come with a “bonus” of Sweeps Coins, often on a dollar-for-dollar basis with the amount the user spends. In other words, they argue that users know they are really purchasing Sweeps Coins for real money gambling – something surveys suggest players overwhelmingly agree with.

As a result, several states have cracked down on sweepstakes casinos by passing legislation that explicitly patches any holes in existing gaming laws that might allow the sites to argue their legality. Other states that have taken action against sweepstakes casinos include Montana, Connecticut, New York, New Jersey, California, and Louisiana. The industry has also faced a number of lawsuits from consumers, including a class-action lawsuit against Drake and Stake.us in Missouri.