Posted on: May 27, 2026, 04:16h.
Last updated on: May 27, 2026, 04:48h.
- Sweepstakes casinos are now illegal in Tennessee
- The sweepstakes casino ban took effect immediately upon Gov. Lee’s signing
- Lee also signed a measure to crack down on insider trading on prediction markets
Online sweepstakes casinos are officially illegal in Tennessee after Gov. Bill Lee signed Senate Bill 2136/House Bill 1885 into law.
Lee’s signature amends the Tennessee Code related to illegal activity. In the Volunteer State, social gaming platforms that utilize a promotional sweepstakes model are now banned.
The law defines such operations as games, contests, or promotions where a “virtual currency, dual-currency, or multi-currency system” is used to allow online slots and casino games to essentially be played for real money.
“This legislation gives the state stronger tools to investigate bad actors, hold them accountable, and shut down unlawful operations that exploit consumers,” said state Sen. Ferrell Haile (R-Gallatin), the chief sponsor of SB2136.
Lee signed the statute on May 22. The governor did not issue a release on the new law.
Sweepstakes Ban Effective Immediately
While most newly enacted bills provide a grace period before their implications take effect, that wasn’t the case with the Tennessee sweepstakes casino measure. Haile said time was of the essence because the unregulated gambling websites were preying on consumers.
This act takes effect upon becoming a law, the public welfare requiring it,” the bill’s language reads.
Sweepstakes casinos that continue to allow their games to be accessed in Tennessee are now deemed to be engaged in an unfair or deceptive unlawful business in violation of the Tennessee Consumer Protection Act.
The Tennessee Consumer Protection Act allows the state to assess civil penalties of up to $15,000 per violation, plus consumer damages. Criminal charges can result in Class B misdemeanors, punishable by up to six months in jail and a $500 fine.
Tennessee does not permit any form of real money casino gambling, including online. The only forms of legal gaming are the state-run lottery and online sports betting.
Tennessee joins Indiana, Maine, and Oklahoma in banning dual-currency sweepstakes games so far in 2026.
Prediction Markets Bill
Along with the Tennessee sweepstakes casino bill, Lee signed Senate Bill 1992.
The new law makes it a Class E felony for a person within the state to try to influence the outcome of an event being traded on a prediction market for their financial gain. In Tennessee, a Class E felony conviction carries a possible imprisonment of one to six years and fines of up to $3,000.
Tennessee has sought to prohibit prediction markets like Kalshi and Polymarket from offering sports event contracts.
In January, the Tennessee Sports Wagering Council, the state agency that regulates sports betting, issued cease-and-desist orders to prediction markets. But in March, a federal judge in Tennessee ruled that the state regulatory agency overreached.
Judge Aleta Trauger sided with the prediction markets on their claims that sports event contracts are swaps, financial markets regulated by the Commodity Futures Trading Commission.
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