Online sports betting booms in Tennessee as sweeps are restricted

Khizar Mundia Published 01/01/2026

As some US states increase restrictions around sweeps gaming, Tennessee is the latest state to start shutting down sweeps, but the state’s online sports betting revenues show that online gambling with still lines is still going strong.

Sweepstakes have long been a controversial gaming category, with operators claiming they’re social games while critics allege that sweeps aren’t much different than real-money gambling. Multiple US states, such as New Jersey and New York, have begun taking meaningful action against sweepstakes casinos, either barring them completely or having them change their platforms so that real-money options aren’t as accessible.

Tennessee government officials are the latest to claim that sweeps need to be better regulated so the public isn’t inconspicuously pushed into an apparent gambling platform in the guise of social gaming, even as the state shows itself to be a hotbed for other forms of online betting.

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Sports betting sees all-time high wagers as sweeps exit Tennessee

Tennessee became an early US state to legalize online sports betting and esports betting sites, but the state only features online platforms and there are no physical casino locations operating. Operators have seen a large number of players who have wagered a reported $13.25 billion on sports betting markets to date.

The state of Tennessee has also received approximately $240 million in tax revenue from sports betting since legalization. Sportsbook operators pay a privilege tax of 20% on adjusted gross revenue, which is used for education, local governments, and mental health programs. That puts Tennessee up among the most successful US states in sports betting revenues.

Image credit: Tennessee Sports Wagering Council Reports

Tennessee’s strict take on US sweepstakes casinos has led to many operators exiting the state while others modify their business operations, all while sports betting efforts are breaking records. It’s a stark contrast, as the state’s gross wagers during October peaked at $658 million, an approximate 17.3% increase from September’s estimated $565 million. Data for November and December haven’t been released, and it remains to be seen whether 2025 can end at a new all-time high.

Tennessee isn’t alone in taking action against sweepstakes, as Indiana, New York, and Maine are also attempting to shut down sweeps in their jurisdictions.

Sweeps operators exit Tennessee amid crackdown

Tennessee’s crackdown on sweeps operators has led to many platforms leaving the state completely. Others have resigned to removing offending elements from their platforms to meet the revised requirements of the state.

Tennessee only allows limited forms of gambling, such as lottery games and state-regulated online sports betting. Regulators have argued that while sweeps claim to be free-to-play entertainment, but the premise revolves around different types of digital coins, one of which can pay out with real money.

This move comes after giant Google also reclassified sweepstakes casinos as gambling. The category changes have made it harder for sweeps as they are now restricted from marketing their games directly to new users, instead needing to work through influencers, affiliate partners, and similar opportunities.

Operators have attempted to rebrand as social plus to avoid the harsher rules, but the move hasn’t yet gained much traction.

Feature image credit: Canva

Khizar Mundia

About Khizar Mundia

Khizar Mundia has been playing video games for as long as he can recall. Things have come a long way since the many days he spent playing the original NES, though. He now covers a variety of competitive games and esports, as well as the world of streaming, ranging from Twitch to Kick. If it’s of interest to gamers, it’s of interest to Khizar.

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