Tennessee and Indiana Target 'Gray Market' Sweepstakes Casinos with Potential Statewide Bans

Another pair of states is exploring sweepstakes casino bans in 2026.

Legislators in both Tennessee and Indiana presented legislation that would outlaw dual-currency online sweepstakes casinos. This follows six other states that approved and enacted sweepstakes casino bans last year.

These online gambling platforms have drawn the ire of state officials since they allow customers to gamble without having to receive a gambling operator’s license or share their profits with the state.

Tennessee hits out at social casinos

Tennessee is rallying behind House Bill 1885, introduced by Rep. Scott Cepicky (R-64). The proposal would consider sweepstakes casinos an official form of illegal gambling under state law.

The bill defines sweepstake casinos as platforms that use virtual currency to determine if customers can play online games, including slot machines. The virtual coins can but are not required to be purchased to play sweepstakes games, and they can be exchanged for cash or different prizes. 

Additionally, the bill would hold platforms offering sweepstakes games, individuals who facilitate or promote the platform, and any other suppliers or facilitators, liable to be punished.

The push to get rid of sweepstakes casinos is hardly surprising, given the top-level direction set by Attorney General Jonathan Skrmetti.

Skrmetti in December announced that he issues cease-and-desist orders to nearly 40 sweepstakes companies. Each letter required the platforms to block access for Tennessee residents and guests within a specific timeline or risk being subjected to legal action.

“The only thing you can be sure about with an online sweepstakes casino is that it's going to take your money,” Skrmetti said in a statement. “They work hard to make these sweepstakes casinos look legitimate, but at the end of the day, they are not. They avoid any oversight that could ensure honesty or fairness. Our Office was glad to chase these shady operations out of Tennessee and will keep working to protect Tennesseans from illegal gambling.”

Indiana could also join the fight

Indiana is taking a similar approach to that of Tennessee with Rep. Ethan Manning’s (R-23) latest proposal.

HB 1052 outlined a plan to ban “dual-currency” platforms, which was amended to “multi-currency.” Penalties were also reduced from criminal to civil, meaning that guilty parties would receive monetary penalties as opposed to time in jail or prison.

The Indiana House Public Policy Committee this week unanimously approved the bill in a 10-0 vote, sending it to a review in front of the full house.

This follows an attempted rebrand by social casinos, many of which agreed to use the moniker “social plus.” The change was an attempt to signal an emphasis on responsible gambling and distinguish American-based operators from illegal offshore competitors, although that hasn’t stopped the increase in scrutiny. 

According to The Business Research Company, the social casino market reached $9.2 billion in 2025. North America was the largest region during the recorded year, with global estimates projecting a $14.4 billion market size in 2030.