Tennessee Signs Sweepstakes Casino Ban Into Law

Tennessee has formally prohibited sweepstakes after Governor Bill Lee signed HB 1885/SB 2136 into law on the final day available for executive action. The decision places Tennessee among a growing number of US states restricting online sweepstakes gaming platforms using virtual currencies.

State lawmakers approved the legislation on April 23 during the closing hours of the legislative session before sending the measure to Lee on May 11. Under Tennessee procedure, the governor had 10 days, excluding Sundays, to either sign the bill, veto it or allow it to become law without a signature. Legislative records show Lee approved the measure directly.

The legislation bans online games using virtual-currency, dual-currency or multi-currency systems designed to imitate gambling products. The law specifically targets bingo, lottery-style games, slot machines, table games, unlicensed sports wagering and video poker.

Tennessee Broadens Gambling Restrictions

With the bill enacted, Tennessee joins California, Connecticut, Louisiana, Montana, New Jersey and New York in banning sweepstakes casinos during 2025. Lawmakers stated that online sweepstakes operators used virtual currency systems to disguise real-money gambling activity.

The conference committee report described sweepstakes platforms as “… 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.”

The legislation also places violations under the Tennessee Consumer Protection Act of 1977. Lawmakers amended the bill before passage to grant regulators additional investigative and enforcement authority connected to the restrictions.

The Tennessee House of Representatives advanced the measure following a 69-17 vote after House and Senate lawmakers reached a conference committee compromise.

Attorney General Pressured Operators

The legislative effort followed action by Tennessee Attorney General Jonathan Skrmetti, whose office issued cease-and-desist notices to multiple sweepstakes casino operators in late 2025. Several companies reportedly withdrew operations from the state after regulatory pressure.

Among the operatorsnamed were Chumba Casino, Fortune Coins, Global Poker, Hello Millions, High 5 Casino, Legendz, Luckyland, McLuck, Modo, Sportzino, Stake, WOW Vegas, Yay Casino and Zula Casino.

“The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money,” said Attorney General Jonathan Skrmetti said in a December news release.

“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.”

Kalshi Challenge Continues

Tennessee continues to face legal disputes involving prediction market operator Kalshi.

A federal district judge granted Kalshi’s request for a preliminary injunction on February 20 after the company challenged Tennessee cease-and-desist orders tied to sports event contracts. Kalshi argued that the Commodity Futures Trading Commission holds sole authority over those contracts at the federal level.

Source:

“Tennessee sweepstakes casino ban signed into law by Gov. Lee”, sbcamericas.com, May 22, 2026