Tennessee Governor Bill Lee has signed new legislation that effectively bans sweepstakes casinos operating in the state, adding Tennessee to a growing list of US jurisdictions moving against dual-currency gaming platforms.
The newly approved law targets online sweepstakes operators that offer casino-style games using virtual currencies while still allowing players to exchange winnings for cash prizes or other real-world rewards. State lawmakers argued that these systems function similarly to traditional gambling despite avoiding standard gaming regulations.
Under the legislation, Tennessee updated its definition of “online sweepstakes games” to classify such activities as gambling. The change gives state regulators and the attorney general expanded authority to investigate operators and take legal action against companies continuing to offer these platforms within the state.
The bill specifically focuses on dual-currency models commonly used by sweepstakes casinos. These platforms usually provide one type of virtual currency for entertainment play and another promotional currency that can later be redeemed for prizes or cash equivalents.
The move reflects a wider national crackdown on sweepstakes gambling products across the United States. Several states have recently introduced or advanced legislation aimed at restricting similar operations, while regulators continue debating whether these platforms should fall under existing gambling laws.
Supporters of the Tennessee measure said the law is designed to close regulatory loopholes and strengthen consumer protections. Critics of sweepstakes casinos have long argued that the platforms operate in a legal gray area while offering products nearly identical to online casino gaming.
The new law is expected to increase pressure on sweepstakes operators that still remain active in multiple US markets.