Governors in Tennessee, Louisiana, and Iowa have signed bills passed in their states targeting the sweepstakes casino industry.
Starting off in Tennessee …
Last week, Tennessee Gov. Bill Lee signed Senate Bill 2136. The measure took effect immediately.
The law defines “online sweepstakes games” as internet-based platforms that use virtual or dual-currency systems that allow users to obtain digital currency through purchases, bonuses, or promotions and then exchange it for prizes or cash equivalents.
It formally outlaws Sweeps Coin gameplay at sweepstakes casinos. SB2136 went through several iterations, including one that stripped language banning sweeps casinos from the bill entirely. There was also an amendment that ordered a study to be conducted on the potential economic impact of a regulated sweepstakes casino industry in Tennessee, but that amendment didn’t make the final bill.
Louisiana represents strongest anti-sweeps action
In Louisiana, Gov. Jeff Landry signed two sweepstakes-related bills, House Bill 53 and House Bill 883.
On its own, HB883 adds this language to the state’s laws on gambling:
Any game, contest, or promotion that is available on the internet or accessible on a mobile phone, computer terminal, or similar access device that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award, cash, or cash equivalents, or any chance to win any prize or award, cash, or cash equivalents, and simulates any form of gambling constitutes gambling by computer.
The bill also targets platform providers and merchant payment processors that support sweeps casinos in Louisiana and allows the Attorney General to take action against such entities. HB883 raises the maximum penalty for operating computer-based gambling games from a $20,000 fine and up to five years in prison to a $100,000 fine while keeping the maximum prison sentence at five years.
HB53 expands Louisiana’s racketeering laws to cover certain gambling-related crimes. It brings offenses classified as “gambling by computer” under the state’s broader anti-racketeering framework.
HB883 states that online games operating with a dual-currency structure designed to imitate casino gambling fall within the definition of “gambling by computer” — so it provides the clear language needed to tie sweepstakes casinos directly to Louisiana’s racketeering laws, which carry some of the harshest criminal penalties in the state.
A racketeering conviction can result in up to 50 years in prison, fines of as much as $1 million, or both. Prosecutors may also pursue additional financial penalties tied to the profits generated from the alleged illegal activity — up to three times those profits.
Ordinary gambling cases typically focus on whether an operator violated state gambling laws, with penalties generally limited to fines or prison terms tied directly to the offense. Racketeering laws, however, are designed to target broader criminal enterprises and patterns of illegal activity.
That distinction could be significant for enforcement against sweepstakes casinos. Prosecutors could potentially pursue not only the operators themselves, but also executives, affiliates, payment processors, software providers, marketers, and others connected to the industry.
HB883 and HB53 passing in parallel in Louisiana represents the strongest anti-sweeps action ever taken by a legislature or regulatory agency.
Both measures become law on Aug. 1.
Iowa bill expands Iowa Racing and Gaming Commission’s authority
Iowa Gov. Kim Reynolds signed Senate File 2289, expanding the Iowa Racing and Gaming Commission’s authority to pursue unlicensed gambling operators, including those offering “illegal sweepstakes.”
Iowa did not pass a direct dual-currency sweepstakes ban. Instead, SF2289 gives regulators clearer authority to send cease-and-desist orders against sweeps operators.
Under the state’s current law, the IRGC does not have the power to act against unlicensed operators. It can only issue warnings and advisories for residents to avoid unlicensed operators.
The measure has effective dates partially on May 15, with the remaining provisions going into effect on July 1.
