Tennessee Bans Sweepstakes in Renewed Push Against the Sector

(AsiaGameHub) –   Despite state regulators being somewhat occupied with prediction markets recently, Tennessee has become the third state this year to officially ban sweepstakes social casinos.

Tennessee Turns Lights Off for Sweepstakes Casinos

The opposition to the sector stems from a common argument: these casinos, by utilizing dual currencies, are essentially offering unregulated iGaming. This is contrary to the industry’s claims and its assertion of historical precedent.

With substantial support, Senate Bill 2136/House Bill 1885 reached the desk of Gov. Bill Lee, who also endorsed the legislation. Consequently, online casinos employing virtual currency, dual currency, and multi-currency systems will no longer be permitted to operate.

“This legislation provides the state with enhanced capabilities to investigate and hold accountable those engaging in illicit activities, and to shut down unlawful operations that prey on consumers,” stated Sen. Ferrell Halie, who sponsored SB2136.

The core issue is that players at social sweepstakes casinos can redeem real-world prizes through these “double systems.” This allows consumers to play with digital currencies, which can then be converted into prizes, including cash.

This aspect of the model has long been a point of contention, and states like Tennessee, which do not permit online casinos, have finally taken a stance on the matter.

State Legislators, AG Welcome the Decision  

Tennessee is not the only state to address this industry; Maine and Indiana are also among those that have implemented bans on the sector, effective in 2026. Tennessee Attorney General Johnathan Skrmetti expressed satisfaction with the outcome.

Skrmetti stated that the passage and signing of the bills were the correct course of action, accusing the sector of attempting to portray sweepstakes casinos as legitimate when they are not.

However, success against the sweepstakes sector does not necessarily guarantee success against the prediction market industry, which the state has also been scrutinizing.