Tennessee Governor Bill Lee (pictured) has signed off on Senate Bill 2136, a proposal that definitively outlaws sweepstakes casinos in the state.
The bill was signed on Friday, May 22, and contains language stating it takes effect immediately upon becoming law.
As a result, remaining operators in Tennessee are now expected to exit the market quickly. Our estimates suggest roughly half of all sweepstakes brands were still active in the state at the time of passage.
The other half left after the Tennessee Attorney General issued cease-and-desist letters to over 40 popular brands including Chumba, McLuck, and Crown Coins last year. AG Jonathan Skrmetti announced the crackdown officially in December.
Summary of SB 2136
SB 2136’s journey through the legislature was far from easy, though. It was introduced in January, alongside its counterpart HB 1885.
The preamble framed the sweeps vertical as already illegal, but also stated that “there exists the need to clarify for the public that such online sweepstakes casinos are expressly illegal given their prevalence in this State”.
The text of the bill added new clauses to Tennessee Code Annotated, Title 47, Chapter 18, defining an “online sweepstakes game” as one that uses a “virtual currency system” where players can “exchange the currency for a prize, award, cash, or cash equivalent, or the chance to win a prize, award, cash, or cash equivalent”.
Rather than levying specific fines, the bill plugged the offence of operating a sweepstakes casino (or supporting this operation) into the Tennessee Consumer Protection Act, exposing operators to civil penalties, injunctions, and potential restitution orders. That meant enforcement would not be a single fixed fine per offence but a civil liability offence where exposure scales with conduct and volume.
This is different from most other anti-sweeps bills which create specific penalties and fines in their own right.
SB 2136 Had a Messy Path to Passage
The bill passed the Senate as March began, then attention turned to companion bill HB 1885 in the House, before switching back to SB 2136 as it started to move through the House.
Next, four amendments were introduced, including one that would have converted the proposal into a study. But the version that advanced in the House instead widened the scope into a more standard anti-gambling measure and removed explicit references to ‘sweepstakes.’ While that House version initially passed, the Senate declined to agree to it.
That disagreement led to the appointment of a conference committee to resolve the differences, and things ultimately reverted to the original bill text. Ultimately, the bill managed to pass on the final day of the legislature’s session, and it’s now been signed by Governor Lee.
This means Tennessee is the fifth state to outlaw sweepstakes casinos this year, joining Indiana, Maine, Oklahoma, and Louisiana. Last year saw six states banning the format: Montana, Connecticut, Nevada, New Jersey, California, and New York.
TN-based sweepstakes players should look out for communication from casinos still operating in the Volunteer State and redeem any remaining SC balances as soon as possible.
Author: Bogdan Lunkan
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