Tennessee and Oklahoma lawmakers took formal action this week to limit the operation of sweepstakes casinos, unanimously passing bills in the Senate that explicitly define certain dual-currency online gaming models as illegal gambling. Both bills have now been transferred to the House of Representatives for further consideration. These votes are the latest actions by multiple states aimed at addressing unregulated online casino platforms that operate outside the existing gambling framework. Simply put, the states are cracking down on this gray practice of exchanging virtual coins for cash from all sides.
Tennessee: Included in consumer protection law, the Attorney General has issued nearly 40 cease and desist letters
The Tennessee Senate passed Bill SB 2136 with a vote of 32-0. This bill amends the "Tennessee Consumer Protection Act" to define online sweepstakes games that use virtual currency systems to allow players to exchange for cash or prizes as illegal gambling, constituting an illegal act that endangers public health, safety, and welfare. By categorizing misconduct as unfair or deceptive acts, the bill authorizes the state Attorney General to investigate and enforce against operators. Attorney General Jonathan Skrmetti has taken action against sweepstakes platforms, and by the end of December 2025, his office has issued cease and desist letters to nearly 40 online sweepstakes casinos in the state, forcing many large companies to exit. SB 2136 has now been transferred to the House, and the companion bill HB 1885 is also under consideration.
Oklahoma: Expanding criminal liability, supplier platforms also cannot escape involvement
The Oklahoma Senate passed Bill SB 1589 with a vote of 48-0. The bill clearly defines "online casino games" and "value tokens" (currency used in dual-currency payment systems to exchange for cash or prizes) and expands the scope of liability from operators to any geographical location providers, game suppliers, platform providers, promoters, or media affiliates that "provide support" for such games. Misconduct will constitute a Class C2 felony, punishable by fines ranging from $500 to $2000 and imprisonment. Senator Todd Gollihar, the proposer, stated that illegal offshore entities cost the state millions of dollars in tax revenue each year, and this legislation is part of a nationwide effort by 41 states to combat illegal offshore gambling. The bill was drafted in consultation with tribal partners to ensure that tribal online gaming platforms are not affected. If passed by the House and signed by the governor, the bill will take effect on November 1, 2026.
National Trend: Multiple states legislate against sweepstakes casinos
The actions of Tennessee and Oklahoma reflect a broader legislative trend. Indiana has completed the legislative process for Bill HB 1052, which has been sent to the governor for signature, authorizing the gambling commission to issue cease and desist letters and impose fines of up to $100,000. The Mississippi Senate passed a sweepstakes ban, but it was blocked in the House. The Iowa Senate recently approved legislation clarifying the enforcement authority of the Iowa Racing and Gaming Commission. Utah lawmakers have advanced measures to expand criminal and consumer protection law enforcement authority. Similar bills in Maine, Florida, Maryland, Louisiana, New York, and Illinois are also advancing. As more states incorporate dual-currency sweepstakes platforms into existing gambling bans or consumer protection frameworks, legislative bodies are continuously considering how to address unlicensed online casino operations before the 2026 legislative cycle.
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