Tennessee Senate Advances SB2136 to Crack Down on Sweepstakes Casinos
Senate Bill 2136 cleared a Senate committee on a unanimous 8-0 vote, expanding civil enforcement tools against alleged illegal online gambling.
LISTEN TO THIS ARTICLE:The Tennessee Senate moved swiftly this week to broaden the state’s legal arsenal against sweepstakes-style online casinos, voting 8-0 to advance Senate Bill 2136. Sponsored by Sen. Ferrell Haile, the measure would classify illegal gambling and related activities as violations of the Tennessee Consumer Protection Act, grant additional investigative authority to the Tennessee Sports Wagering Council and the state Attorney General, and explicitly target virtual-currency sweepstakes operations that seek to sidestep gambling and lottery laws.
Under the bill’s language, games that rely on a currency purchased, received through promotions, or given free with other purchases and then exchanged for prizes, awards, cash, or cash equivalents would fall within the scope of state enforcement. The companion House measure, House Bill 1885, carries similar provisions and has been assigned to committees for initial review.
Attorney General Steps Up Enforcement
Sen. Haile said the bill was developed in close coordination with the Attorney General’s office and the Tennessee Sports Wagering Council to plug enforcement gaps.
"Senate Bill 2136 was brought to me by the Attorney General’s office and the Tennessee Sports Wagering Council to address growing concerns about illegal online gambling in our state. This legislation closes existing enforcement gaps by providing the Attorney General with clear civil authority to take action against illegal operators and by strengthening protections for consumers.", said Sen. Ferrell Haile.The measure clarifies the statutory definitions for casino-style games and sweepstakes, Haile added, and empowers the Attorney General to seek civil injunctions in cases where criminal statutes already apply but civil remedies are unclear. The bill also aims to shut down platforms operating without adequate age verification or controls that would prevent self-excluded individuals from participating.
Tennessee Attorney General Jonathan Skrmetti has already signaled a tougher posture toward suspected sweepstakes casinos. In late December his office issued formal cease-and-desist letters to nearly 40 online sweepstakes platforms, alleging they had been operating outside Tennessee law by using virtual currency systems to mask real-money wagering. Skrmetti said the enforcement action forced a number of platforms to disable contested features or agree to wind down operations within weeks.
"The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money", Skrmetti said. "They work hard to look legitimate, but they avoid oversight that could ensure honesty or fairness. Our office was glad to chase these shady operations out of Tennessee and will keep working to protect Tennesseans from illegal gambling."
More Regulation
What This Means for Operators and Regulators
Industry observers say Tennessee’s move mirrors a wider national trend. Several states have recently tightened rules or pursued enforcement against sweepstakes-style gaming, and advocates for stricter oversight argue that virtual-currency mechanics are being used to circumvent state gaming and lottery statutes. As many as nine states are reported to be weighing legislative responses to sweepstakes casinos during the 2026 cycle. Maine offers a recent example of that shift, as lawmakers in Augusta introduced Legislative Document 2007 to formally classify dual-currency sweepstakes casinos as illegal gambling under state law.
For operators, the bill represents an increased risk profile in Tennessee. Regulators would be authorized to demand documents and other information across a broader set of statutes, and civil injunctions could be pursued in parallel with criminal enforcement, increasing the speed and scope of actions that can be taken against suspected illegal services.
Sen. Haile emphasized that the legislation is not intended to disrupt licensed gaming activity. "This bill does not affect legal sports betting, fantasy sports and the Tennessee Education Lottery or lawful nonprofit gaming," he said. "It does not make free games illegal. Its primary focus is on operations running real-money wagering under the guise of sweepstakes."
With committee passage secured, SB2136 now moves to further legislative consideration. If adopted, the bill will codify an aggressive civil enforcement framework that could become a template for other states grappling with the virtual-currency sweepstakes model.
RELATED TOPICS: Regulation
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