Tennessee Proposes Explicit Ban on Sweepstakes Casinos

Tennessee lawmakers have introduced legislation to clearly prohibit online sweepstakes casinos and give the state attorney general more authority to investigate and shut down operators using promotional sweepstakes models to offer gambling. House Bill 1885, sponsored by Rep. Scott Cepicky, frames these platforms as illegal gambling misrepresented as free-to-play entertainment.

The bill asserts 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.”

Defining “Online Sweepstakes Games”

HB 1885 introduces a statutory definition of an “online sweepstakes game” to address the dual-currency system used by many sweepstakes casinos. The legislation describes such a game as one that: “Utilizes 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.”

It clarifies that covered platforms include those 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.”

Under HB 1885, operating, promoting, or facilitating online sweepstakes games is unlawful. The bill extends liability beyond operators to vendors, partners, and intermediaries, treating violations as unfair or deceptive acts under the Tennessee Consumer Protection Act. Civil penalties and injunctive relief may be pursued alongside criminal sanctions.

Part of a Broader 2026 Crackdown

Tennessee becomes the tenth state this year to act against dual-currency platforms or push legislation targeting unregulated gambling. Other states pursuing similar measures include Maine, Florida, Indiana, Mississippi, Maryland, Virginia, Oklahoma, Utah, and Iowa. Regulators increasingly view promotional sweepstakes as a way to evade gambling laws.

Platforms Exit Tennessee Amid Enforcement

Before the bill’s introduction, enforcement had already accelerated. From November, more than30 platforms—including Chumba, Modo, High 5, Stake, and Pulsz—began leaving Tennessee. Observers suspected intervention by the Tennessee Sports Wagering Council or Attorney General Jonathan Skrmetti.

By late December, Skrmetti’s office issued cease-and-desist letters to nearly 40 online sweepstakes casinos. In a press release, he stated that his office had “successfully halted the operation of multiple illegal online sweepstakes casinos in Tennessee” and described the dual-currency model as “a façade to hide the fact that participants may engage in real-money gambling.”

All affected platforms either removed the sweepstakes components of their offerings or agreed to cease Tennessee operations entirely.

Utah’s Legislation Reflects Consumer Protection Focus

Meanwhile, Utah advanced Senate Bill 38 to strengthen consumer protection laws and address deceptive online practices. The bill empowers the Division to “administer and enforce” regulations covering prize promotions, ticket sales, automatic renewal contracts, and related statutes. While SB 38 does not explicitly mention sweepstakes casinos, it targets platforms using virtual currency, promotional credits, or dual-wallet systems to conceal real-money gambling. Its swift passage highlights reliance on consumer protection frameworks, rather than traditional gaming regulations, to tackle unlicensed gambling-adjacent products.