Tennessee Drops Sweeps Ban and Orders Study on Regulation

Tennessee House Bill 1885 is now moving forward in amended form after originally being introduced as a ban on sweepstakes casinos. Instead of outlawing the sector, the bill now defines online sweepstakes games and directs the Tennessee Advisory Committee on Intergovernmental Relations, or TACIR, to study the market in the state.

That makes it one of the more unusual sweepstakes bills seen this year. While other states have moved toward bans and enforcement crackdowns, Tennessee is now looking at whether a regulated model could generate revenue instead.

What the Bill Would Do

Under the amended version, TACIR would examine the online sweepstakes games available in Tennessee and estimate how much revenue the state could generate if those games were taxed and regulated in a way similar to sports betting. The committee would then have to report its findings to the speakers of the House and Senate by January 31, 2027.

In other words, Tennessee is no longer asking only whether sweepstakes casinos should be banned. It is now asking whether the state could build a framework around them instead.

Why This Stands Out

Sweepsy described HB 1885 as the first bill of its kind to address the sweepstakes casino industry this way. The article notes that New Jersey previously considered regulation without first ordering a study, but that proposal did not go anywhere. Tennessee’s bill is different because it creates a formal process to measure market size, tax potential, and the possible structure of regulation.

Much of the legislative energy around sweepstakes casinos has been built around bans, cease-and-desist letters, and attempts to close legal gray areas. Tennessee, at least for now, is choosing a more measured route.

Industry Response

The Social Casino Gaming Leadership Alliance welcomed the revised approach. Managing Director Sean Ostrow said Tennessee was choosing to study the issue rather than rush into a ban based on incomplete information.

Ostrow also said the group would support state policies that include consumer protection rules and a fair tax structure for online games. According to the same report, the SGLA estimates that a strong Tennessee market for sweepstakes casinos could generate about $25 million in annual state sales tax on player purchases, based on the prevailing Tennessee sales tax rate.That kind of argument could also shape how lawmakers think about adjacent categories such as social casino gaming.

Could Other States Follow?

That is now one of the bigger questions hanging over the bill. Sweepsy reported that the SGLA believes other states could eventually take the same approach, especially if lawmakers decide they want more data before moving toward an outright prohibition.

The article also points to similar economic studies in Virginia and Pennsylvania, where analysts projected that a legal and regulated sweepstakes market could generate tens of millions of dollars in annual state revenue. Those figures are being used to support the argument that regulation may offer states more value than a blanket ban.

What Comes Next

HB 1885 is awaiting a hearing before the House Finance, Ways, and Means Subcommittee and is currently slated for April 14. Tennessee’s 2026 legislative session ends on April 24, so the bill still has a narrow window to move through the remaining steps in both chambers if lawmakers want it to pass this year.

For now, the bill does not legalize or regulate sweepstakes casinos on its own. But it does signal something important. Tennessee is at least willing to study the market seriously, and that alone sets it apart from many of the harder-line approaches seen elsewhere in 2026.

REFERENCES

Tennessee General Assembly