Tennessee Shoots Down Sweepstakes in Renewed Push Against Sector

Even though state regulators have been somewhat distracted by prediction markets of late, a third state, in the face of Tennessee, has now officially gone on to prohibit sweepstakes social casinos this year alone.

Tennessee Turns Lights Off for Sweepstakes Casinos

The argument against the sector comes from a familiar place – by using dual currencies, these casinos are effectively offering unregulated iGaming. Despite the industry arguing the opposite, and adding that it was established in a historic precedent. 

With an overwhelming backing. Senate BIll 2136/House Bill 1885 eventually landed on the desk of Gov. Bill Lee, who also threw his support behind the legislator. Moving forward, virtual currency, dual currency, and multi-currency online casinos will not be able to play.

“This legislation gives the state stronger tools to investigate bad actors, hold them accountable, and shut down unlawful operations that exploit consumers,” argued Sen. Ferrell Halie, who sponsored SB2136. 

The original issue lies in the fact that players at social sweepstakes casinos can cash out real-world rewards using these “double systems,” which would see consumers play for the digital currencies, but then convert them into prizes, including cash.

This has long been a debatable part of the model, with states such as Tennessee, which do not allow online casinos, finally taking issue with the matter.

State Legislators, AG Welcome the Decision  

The Volunteer State is not the only one to have responded to this industry, with others, including Maine and Indiana, also imposing a ban on the sector in 2026. Tennessee Attorney General Johnathan Skrmetti, was pleased with how events have unfolded.

Skrmetti has said that the passage and signing of the bills was the right call, accusing the sector of trying to make sweepstakes casinos “look legitimate” and pointing out that they were not. 

Success against the sweepstakes sector, though, is not meant to guarantee success against the prediction market industry, which the state has been tilting at.