Last updated: April, 2026
Summary: Seeing mixed headlines about sweepstakes casinos in Tennessee—like whether they’re even legal—and wondering how it affects your play? SB 2136, a bill aimed at banning sweepstakes casinos, is now in its final stage after passing both chambers on April 23 and reaching Bill Lee’s desk. At this point, a few outcomes are possible. The governor can sign it, and the law kicks in right away. He can veto it, which means lawmakers would need to vote again to override it. Or he can do nothing, and after 10 days, it automatically becomes law.
Key Takeaways:
- Sweepstakes casinos are nearing a potential ban, with SB 2136 passing on April 23, 2026, and now awaiting Bill Lee’s decision.
- If it takes effect, Tennessee would join states like Washington, Michigan, Montana, California, New York, Connecticut, Nevada, Louisiana, New Jersey, Idaho, and Indiana that already restrict sweepstakes casinos.
- This anti-sweepstakes push has been growing since 2025, when Jonathan Skrmetti sent cease-and-desist letters to 38 operators, pushing major sites like Stake.us, Wow Vegas, Chumba, High 5 Casino, and Mega Bonanza out of the state.
- Tennessee has long been a restrictive market, with real-money online casinos, tribal gaming, and horse racing or pari-mutuel betting all prohibited. So your legal options are narrowed down to the state lottery, online sports betting, and social-style casinos.
Are Sweepstakes Casinos Legal in Tennessee?
Yes, sweepstakes casinos are still available in Tennessee for now, but that could change soon. SB 2136, which directly targets dual-currency platforms, passed both chambers on April 23, 2026, and is now awaiting a final decision from Bill Lee.
If you’re wondering why this is happening, it actually fits Tennessee’s long-standing approach to gaming. The state has some of the strictest rules in the country, with no land-based casinos, no tribal gaming, and not even real-money online casinos . Under laws like Tennessee Code Annotated Title 47, anything that resembles traditional gaming is tightly restricted, which is one of the reasons sweepstakes platforms have operated in a gray area.
For a time, that workaround held. But the new bill focuses on dual-currency casinos where virtual currencies like Sweeps Coins can be redeemed for real prizes such as cash or gift cards, effectively closing that gap as lawmakers push back on how these platforms operate.
💡 We’ve seen this pattern before:In states like
California,
Indiana, Maine,
New Jersey, and Connecticut, governors have signed similar anti-sweepstakes measures into law, while in Louisiana, the governor ultimately vetoed a comparable proposal.
What’s SB 2136 All About?
At its core, SB 2136 is about redefining how Tennessee treats sweepstakes-style platforms. The bill focuses on how these sites actually operate, particularly the dual-currency model built around:
- Gold Coins (GC): used purely for gameplay and entertainment, with no redemption value.
- Sweeps Coins (SC): can be earned through promotions, AMOE , and other methods, then redeemed for prizes once you meet playthrough requirements and minimum SC thresholds.
The legislation also defines what qualifies as an “online sweepstakes game” and makes it clear that running these platforms could be treated as a serious offense. These aren’t minor penalties—violations may rise to felony-level charges, with enforcement handled under the Tennessee Consumer Protection Act.
Here’s how SB 2136 has progressed:
January 2026 Introduction
Bill introduced in the Tennessee legislature.
February 2026 Committee Review
Senate Commerce and Labor Committee advanced the bill 8–0, without debate.
Early March 2026 Senate Floor Vote
Senate passed it unanimously (32–0) and sent it to the House.
House Stage Amendments and Rejection
The House amended the bill, removing references to sweepstakes casinos and virtual currencies, instead focusing on strengthening enforcement of existing gaming laws. This version passed 67–20, but the Senate rejected it.
Conference Committee Reaching Compromise
Lawmakers reached a compromise and reinstated the original anti-sweepstakes language.
April 24, 2026 Final Passage
Final passage on the last day of the session, with the House voting 69–17–1 and the Senate approving it 25–5.
💡 How to stay on the safe side:
The bill doesn’t target players directly, but the outcome is the same—access to sweepstakes casinos can change fast. For that reason, it’s best to stick with fully legal gaming options.
Why Are Sweepstakes Casinos Leaving Tennessee?
The mass exit didn’t start with SB 2136, but with one man and a stack of letters. In December 2025, Attorney General Jonathan Skrmetti sent cease-and-desist letters to 38 sweepstakes casino operators, citing the state’s existing constitutional prohibition on lotteries and its consumer protection statutes.
The message was clear: comply or face consequences. As Skrmetti put it, “The only thing you can be sure about with an online sweepstakes casino is that it’s going to take your money.” And many operators acted quickly in response.
The exits started rolling in even before the AG made the official announcement on December 29:
- High 5 Casino, Stake.us, RealPrize, LoneStar Casino, and Lucky Bits Vegas had already shut down access in Tennessee earlier in December
- VGW — the company behind Chumba Casino, LuckyLand Slots, and Global Poker — announced it would phase out Sweeps Coin gameplay, completing the wind-down by late December
- A1 Development — which runs NoLimitCoins, Fortune Wheelz, Tao Fortune, FunzCity, Funrize, and Storm Rush — also blocked access to its platforms shortly after
- Social sportsbooks weren’t spared either, with Thrillzz, KicKr, and Rebet exiting the Tennessee market around the same time
- Mega Bonanza and Zula Casino were also among the operators that left following the cease-and-desist campaign
💡 Some operators took a different approach:
Crown Coins adjusted its model by restricting access to Sweeps Coins and separating them more clearly from Gold Coins to align with sweepstakes rules, rather than exiting the state outright.
What Are Tennessee Players' Options After July 1, 2026?
Just because sweepstakes casinos are likely on the way out doesn’t mean your options disappear. Tennessee actually offers a decent range of legal alternatives worth knowing about.
Here’s what’s still on the table:
- Licensed Online Sports Betting: This is the strongest option on the table. Tennessee was the first state to legalize online-only sports betting back in 2019 under the Sports Gaming Act, and the market has been active ever since. There are no physical sportsbooks—everything happens online, with 12 licensed operators, including major platforms like DraftKings, FanDuel, and BetMGM.
- Tennessee Education Lottery: Simple, state-run, and fully legal. If you enjoy scratch tickets or draw games, the lottery remains a straightforward, low-stakes option.
- Daily Fantasy Sports (DFS): Platforms like DraftKings and FanDuel also offer DFS contests, which are legal in Tennessee. It’s a skill-based format and a natural fit if you already follow sports.
- Social Casinos: These are still available, but it’s important to understand how they work. Social casinos offer casino-style games for entertainment only, with no option to redeem prizes for cash or cash equivalents.
💡 You're not left without options:
Sports betting is legal, regulated, and widely available across Tennessee. If slots, table games, or other popular casino-style games are what you’re after, social casinos keep the fun going without crossing into restricted or potentially prohibited territory.
Key Facts About Gaming Laws in Tennessee
To understand why sweepstakes casinos hit such a wall in Tennessee, it helps to look at the state’s broader gaming landscape—because it’s one of the strictest in the country.
Here's the baseline:
- No commercial casinos — not a single one, anywhere in the state
- No tribal gaming — Tennessee has no federally recognized tribes with gaming compacts
- No lotteries — the Tennessee Constitution explicitly prohibits them, with one exception carved out for the state-run Education Lottery
This isn’t accidental. It reflects a long-standing, deliberate approach to gaming that’s been built into Tennessee law for decades.
The one area where the state has taken a more flexible approach is online sports betting. In 2019, the Sports Gaming Act made Tennessee the first state in the U.S. to legalize online-only sports betting — no physical sportsbooks, just mobile and desktop platforms. The Tennessee Sports Wagering Council oversees the market, handling licensing and compliance across the state’s 12 approved operators.
Beyond that, the boundaries are firmly in place. Bill Lee has been vocal about opposing casino expansion and has shown no appetite for loosening gaming access further — and that stance isn’t changing anytime soon. So when sweepstakes casinos arrived and tried to operate here, they weren’t navigating a gray area so much as stepping into a state that had already decided where it stood — and meant it.
Do You Pay Taxes on Sweepstakes Prizes in Tennessee?
The good news is that Tennessee has no personal income tax. The Hall Tax, which previously applied to investment income, was fully eliminated in 2021, so the state won’t tax your winnings .
Federally, though, you're not off the hook. Any prizes you redeem count as "other income" in the eyes of the IRS, and you'll need to report them — typically via a 1099-MISC if your redemptions hit the reporting threshold. It’s the same treatment as any other sweepstakes prize, so it’s easy to overlook until tax season rolls around.
One thing to keep in mind: if you itemize your deductions, you can deduct gaming losses — but only up to the amount you’ve reported in winnings. You can’t use losses to offset other taxable income beyond that.
So while Tennessee’s zero state tax is a genuine advantage, make sure you’re keeping the federal side on your radar.
💡 What this means for you:
You won't owe Tennessee a penny on sweepstakes prizes, but federal reporting still applies. If you’ve redeemed a significant amount, it’s a good idea to set some aside and check in with a tax professional to make sure everything is covered.
What’s Next for Sweepstakes Casinos in Tennessee?
At this point, it’s less about whether something changes and more about how it plays out. SB 2136 is sitting on Bill Lee’s desk, and given his track record on gaming, many expect him to sign it. If he does, the bill would take effect immediately—but even if he takes no action, it would still become law after 10 days. A veto remains possible, though it would go against the broader direction the state has been moving in.
If the bill does move forward, Tennessee would join a growing list of states that have taken steps to restrict sweepstakes casinos, including Washington, Michigan, Montana, California, New York, Connecticut, Nevada, Louisiana, New Jersey, Idaho, and Indiana. That’s part of a wider trend, as more states take a closer look at how these platforms operate.
For Tennessee players, that means it’s worth paying attention to how things unfold. Sweepstakes casinos are still technically available for now, but the landscape is shifting, and the legal alternatives covered above—sports betting, DFS, and the state lottery—are likely to remain the more stable options.
💡 Plan ahead:
Don’t wait for SB 2136 to start thinking about your next move. Many operators have already exited, and while the final outcome isn’t set in stone, the direction is becoming clearer. Focus on legal, regulated options.
Sweepstakes Casinos in Tennessee: FAQs
Are sweepstakes casinos legal in Tennessee in 2026?
For now, sweepstakes casinos are still accessible in Tennessee. But keep in mind SB 2136 passed both chambers on April 23, 2026, and is now just one step away from a ban. It’s awaiting a decision from the governor—if signed, it takes effect immediately, or automatically after 10 days if he takes no action.
What is SB 2136?
SB 2136 is a Tennessee bill that would make sweepstakes casinos illegal under consumer protection law. It targets sites that use virtual currencies that can be redeemed for prizes like cash or gift cards. If enforced, running or promoting these platforms could be treated as a felony.
Which sweepstakes casinos have left Tennessee?
Several major sweepstakes casinos have already exited Tennessee, including Chumba Casino (VGW), Stake.us, High 5 Casino, Pulsz, WOW Vegas, LoneStar, RealPrize, and Lucky Bits Vegas. Most of these moves followed cease-and-desist letters issued by Jonathan Skrmetti, which pushed operators to pull out of the state.
What are legal alternatives to online casinos in Tennessee?
Tennessee offers 12 licensed online sportsbooks for players 21+, along with the statewide Tennessee Education Lottery. Daily Fantasy Sports platforms are also legal, and social casinos remain available as long as they are for entertainment only and don’t offer prize redemptions.
Does Tennessee have land-based casinos?
No, Tennessee doesn’t have any land-based casinos. There are no commercial or tribal casinos in the state because it has no federally recognized tribes, and lawmakers haven’t passed legislation allowing casino resorts.
Do you pay taxes on sweepstakes prizes in Tennessee?
Yes, but only at the federal level. Tennessee doesn’t have a state income tax, so sweepstakes prizes are taxed federally and usually reported as “other income” on Form 1099-MISC.
What is the minimum age for sweepstakes casinos in Tennessee?
The minimum age for sweepstakes participation in Tennessee has historically been 18. However, that may soon become irrelevant—if Bill Lee signs SB 2136, sweepstakes casinos would be effectively banned in the state.
18+ only. Void where prohibited. Sweepstakes casinos operate under promotional sweepstakes models and are intended for entertainment purposes only. No purchase is required to participate or claim prizes. Sweepedia.com is an independent review platform and does not have any ownership interest in sweepstakes casino operators. Please play responsibly. For more on healthy play habits, visit our responsible gameplay guide.
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