Tennessee Moves Toward Sweepstakes Casino Ban

Tennessee lawmakers have approved legislation to ban sweepstakes casinos, sending bill SB 2136 to Governor Bill Lee after a day of procedural disputes and revisions. The measure passed both chambers on April 23, following a conference committee agreement.

The bill positions Tennessee to join Indiana and Maine in prohibiting sweepstakes-style gaming in 2026. It defines and outlaws online sweepstakes casino games that use virtual or multi-currency systems and simulate casino-style gambling, classifying violations under the Tennessee Consumer Protection Act of 1977.

The path to final approval involved a series of reversals between the House and Senate. The bill was initially approved by the Senate in March without encountering any resistance. However, the House amended the bill to strip off the direct references to the sweepstakes casinos and highlight gambling enforcement instead. The Senate was not satisfied with the amendment, prompting the creation of a conference committee to sort out the discrepancies.

Eventually, the lawmakers settled for an amended bill containing all the original clauses about the sweepstakes casinos. According to the law, online sweepstakes are internet applications that individuals can access via their mobile devices.

The players have the liberty of using virtual currency that may be purchased or gifted, but can later be converted into money or prizes. The bill clearly states that operating or advertising the platforms is a felony offense.

Enforcement would fall under existing consumer protection statutes, allowing for civil penalties alongside traditional gambling-related sanctions. The bill now awaits formal enrollment before reaching the governor’s desk.

If no action is taken within 10 days, the bill becomes law automatically. The legislation would take effect immediately upon enactment.

The move aligns Tennessee with a growing number of states targeting sweepstakes casinos through statutory definitions and prohibitions.

Oklahoma and Colorado highlight diverging paths

While Tennessee is implementing new regulations on sweepstakes casinos, other states are adopting their own ways to legalize sports betting.

In the Oklahoma sports betting market, a bill seeking to create a regulated industry has been defeated. It was revived but eventually voted down by the Senate. The proposed bill sought to legalize both offline and online sports betting with the help of the state and tribes. While it enjoyed the backing of some key stakeholders such as tribal officials, schools, and the Oklahoma City Thunder, opposition due to concerns about addiction and the sovereignty of the tribes prevented its passage. A motion to reconsider has been made; hence, future discussions are possible.

Legislators who oversee the Colorado sports betting market took the opposite approach by removing the ban on proposition bets from the SB 131 proposal. Lost tax revenue was the driving factor, as prop bets account for approximately one-fourth of betting activity. The revised bill still includes measures tied to consumer protections, such as advertising limits and deposit controls.

Separately, SB 163 advanced, proposing structural changes to oversight by eliminating the state racing commission and transferring authority to the gaming control body. The measure also expands enforcement against unlicensed operators and broadens self-exclusion programs.