Tennessee Next State To Shutdown Sweepstakes Casinos

Tennessee Gov. Bill Lee has signed Senate Bill 2136 into law, legislation that prohibits online sweepstakes casinos and adds the state to a rapidly expanding list of jurisdictions moving against the industry. 

The law, which the governor approved on May 22, targets a business model built around two types of virtual currency. One is sold directly to players, while the other is distributed free through promotions or bundled with purchases. 

Players use both to participate in casino-style games, with certain winnings convertible to real money. Operators had long argued that this structure fell within the bounds of legal promotional sweepstakes. Tennessee's new legislation formally rejects that position. 

Prohibited activities under the law include slot simulations, video poker, table games, bingo, and unlicensed Tennessee sports betting. Legal sports betting, fantasy sports, lottery products, and free-to-play games are not affected. 

Violations, therefore, fall under the Tennessee Consumer Protection Act, with enforcement authority vested in Attorney General Jonathan Skrmetti, who had already issued cease-and-desist letters to roughly 40 platforms in late December 2025. All of them complied before the bill was signed into law. 

Several major platforms left Tennessee last year as the anti-sweepstakes movement grew, leaving most consumers feeling little practical change after the signing. The law took effect immediately upon being signed. 

Oklahoma also moves to close the sweepstakes loophole 

Tennessee was not the only state finalizing action around the same period. Oklahoma's legislature went a step further, overriding Gov. Kevin Stitt's veto earlier in the month to enact Senate Bill 1589.  

The veto override cleared the state Senate by a 34-10 margin and the state House by a 68-19 margin, just barely meeting the two-thirds threshold required in both chambers. 

Stitt had argued the legislation was too broad, claiming it criminalized everyday apps and created a new felony classification that extended liability to businesses and service providers beyond the gambling industry. 

Under the law, anyone found guilty of providing sweepstakes casino services in Oklahoma faces a Class C2 felony charge and fines ranging from $500 to $2,000. That liability extends to operators, platform providers, promoters and employees. 

Oklahoma's tribal gaming industry, which holds exclusive rights to most casino-style gaming under compacts with the state, had supported the legislation, viewing unregulated sweepstakes platforms as direct competition operating outside the established legal framework. 

Oklahoma became the third state to officially ban sweepstakes casinos in 2026, joining Indiana and Maine, both of which passed similar legislation earlier in the year. The Oklahoma ban is set to take effect on November 1, 2026, giving operators a defined window to exit the market. 

Tennessee and Oklahoma follow earlier action in California, Connecticut, Indiana, Iowa, Maine, Montana, New Jersey, and New York.