Sweepstakes Casino Crackdown: Tennessee Enacts Ban With Results Mixed Elsewhere
Tennessee became the latest state to ban dual-currency sweepstake casino platforms. A Sweepstakes Casino Crackdown led to bans in California, New York, and New Jersey last year. The industry entered 2026 facing an existential crisis. Several states followed suit this year. But the world has not come to an end - at least for now.
A bill signed by Gov. Bill Lee on Friday make the operation and promotion of dual-currency platforms illegal in Tennessee. Many operators, however, already exited the state due to pressure from the state's attorney general.
Indiana enacted a ban in March. Maine followed as Gov. Janet Mills signed a bill (LA2007) outlawing sweepstakes into law on April 6. A new law outlawing sweepstakes casinos takes effect in Iowa on July 1. Louisiana's sweepstakes ban becomes law on August 1. Oklahoma’s anti-sweeps bill SB 1589 was vetoed, but lawmakers overrode it. It becomes law on November 1.
But push to ban sweepstakes casinos came up lemons this year in Minnesota, Virginia, Mississippi. and Maryland. In addition, Florida said “no” to any additional limits on gaming.
Eleven states thus far have outright banned sweepstakes casinos or dual-currency play:
- California
- Connecticut
- Idaho
- Indiana
- Iowa
- Louisiana
- Maine
- Montana
- New Jersey
- Oklahoma
- Tennessee
- Washington
California’s dual-currency ban took effect on Jan. 1, officially ending the Golden Era of Sweeps. The 2025 Crackdown on sweepstakes casinos pushed the industry to the edge of a fiscal cliff, especially with New York
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'Lawmakers Never Heard The Other Side Of The Story'
"We knew 2026 was going to be a challenge - opponents in the real-money gambling space have been pushing regulators and lawmakers to ban sweepstakes for almost 3 years now, and most lawmakers never heard the other side of the story," Sean Ostrow, Managing Director of the Social Gaming Leadership Alliance, an industry trade group, told Bookies.com Tuesday.
"2026 was the first opportunity SGLA has had to push back on the misconceptions, including showing that Social Plus operators do in fact have strong consumer protections and that regulating the industry can lead to significant state revenue through sales tax and registration fees. It will be a process, but we are pleased with the number of states that have already taken a deliberative approach and considered the pragmatic alternatives to bans. We plan to build on the progress we made this year towards our ultimate goals of protecting consumers, protecting digital innovation, and making Social Plus a well-regulated product category," Ostrow added.
And the social casinos community got a much-needed lift – not to mention millions in earned media – when Tyler Reddick drove the Chumba Casino Toyota to Victory Lane in the Daytona 500 for Michael Jordan’s 23XI Racing Team. Reddick won the NASCAR Series' first three races of 2026. And 4 of the first 5 overall.
Reddick told bookies.com before the NASCAR season that his play on Chumba is limited to the free coins. “The slots are fun, but I enjoy the table games, mainly blackjack,” he said. “But I haven’t had a lot of luck at it.”
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Sweepstakes Face Continued Blowback From States
Players now must navigate a patchwork of laws that vary by state. They could well find themselves unknowingly on offshore/illegal platforms. This concern remains viable even in states where social play remains legal.
Operators and suppliers often don’t stick around for long once sweepstakes bans move close to implementation. Or following interdiction by law enforcement personnel.
Tennessee Attorney General Jonathan Skrmetti issued cease-and-desist orders to nearly 40 sweepstakes operators in late 2025, claiming they operated an illegal lottery. All complied and agreed to leave the state. Players often get caught in the middle in these situations
During the Winter Meeting of the National Council of Legislators from Gaming States in San Juan in December, the topic of sweepstakes casinos took center stage.
"We want to be regulated by the states and pay taxes," said Jeff Duncan, Executive Director of the SGLA. "These are adult games. We have sweepstakes laws that govern gaming, but we're trying to do it in the 21st Century," added Duncan, a former South Carolina congressman.
Duncan likened the Gold Coins used by sweepstakes casino operators to the "Monopoly" game offered by McDonald's, or the "Publishers Clearing House" sweepstakes.
NCLGS President Shaun Fluharty, a member of the West Virginia Legislature, said: "sweepstakes offer illegal gambling and a revenue threat."
Wherever sweepstakes casinos have been banned or face cease-and-desist orders, the redeemability of Gold Coins for real money is the key issue. "This is illegal gambling. That's the whole argument. Social Plus is a great pivot and a lot of politicking, but not great policy. If you buy $30 sweeps coins for 30 coins, that's a redeemability issue. It's hard to argue you're separate from an iGaming model," Fluharty said.
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What Are Sweepstakes Casinos?
Sweepstakes casinos spent the past several years operating in a legal gray zone that infuriated lawmakers, tribal nations, and regulated gaming operators. They became one of the biggest storylines in 2023 and 2024 — until prediction markets overtook them this year — largely because of their billion-dollar growth and their billion-dollar loophole.
Unlike traditional online casinos, sweeps sites don’t accept money directly for games. Players instead buy Gold Coins — tokens with no cash value — for entertainment. In return, they may receive Sweeps Coins as a “free promotional bonus.” Those Sweeps Coins can then be redeemed for real cash prizes. In practice, it looked and felt like online casino gambling. In theory, it lets companies argue they weren’t violating state anti-gambling laws.
Users treat the sites like casinos anyway: spinning slots, playing blackjack, and chasing payouts.
At October’s Global Gaming Expo in Las Vegas, American Gaming Association President Bill Miller escalated the industry’s pushback and all but declared war on sweepstakes casinos, prediction markets, and offshore operators.
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“These illegal actors aren’t fooling anyone. Our own research found that 90% of sweepstakes customers call what they’re doing ‘gambling.’”
Miller closed with a line aimed squarely at the business model itself:
“You can call it a sports event contract … a skill game ... a sweepstakes … you can call it whatever you want. But it’s still gambling. And if it’s gambling, it needs to play by rules that uphold state and tribal sovereignty.”
Sweepstakes operators merged their efforts last year into the aforementioned SGLA. The organization initially referred to these products as “Social Plus Games” in public pronouncements. The group describes these products as “interactive board, card, and casino-style games” where platforms provide free-to-play experiences where players can always participate without payment, with optional in-game purchases to enhance and extend gameplay.”
The dual-currency model operates around the premise of so-called “Gold Coins.” Patrons can play without depositing real money. Or they can purchase “Gold Coins” as currency for use on the gaming platforms. Those game-play coins can be converted back to cash when the players are done.
The pro dual-currency legal argument centers on the basic rules of any sweepstakes: prize, consideration, and chance. Sweepstakes casino operators argue that their platforms are marketing tools for “digital entertainment offerings.” They also provide the public with alternative entry methods that do not require a purchase.
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The Sweeps Industry’s Uncertain Future
While the heyday of sweepstakes casinos slipped into the dustbin of gaming history, they remain viable for operators – and players.
Betr co-founder Joey Levy tells bookies.com his company plans to press forward in the social-sweepstakes space. Betr's “Super App” features a dual-currency casino and sportsbook.
Levy says predicting the long-term regulatory outcome is nearly impossible.
“I think anyone who pretends to know exactly what the regulatory landscape will look like is a little bit full of it,” he told Bookies.com in March.
Still, he believes consumer demand will ultimately shape how lawmakers approach the issue.
“These products are legal in the majority of the country, and consumers clearly want them,” Levy said. “The goal should be to work with regulators and lawmakers to build frameworks that allow innovation while protecting consumers.”
Meanwhile, Novig currently operates its sports-based prediction platform using a dual-currency model. But its co-founder, Jacob Fortinsky, tells bookies.com that the site will switch over once it receives approval to operate as a Designated Contract Market by the Commodities Futures Trading Corporation.
Each cited the same concerns: no consumer protections, unfair competition with legal gaming, and widespread user confusion. Whether a new era — regulated, transparent, and tribe-aligned — replaces it remains an open question.
"Be interested to see how the chips fall in a year," Fluharty said.
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