Tennessee Governor Signs Sweepstakes Casino Ban, Prediction Market Manipulation Bill
Tennessee Gov. Bill Lee has signed legislation banning online sweepstakes casinos and creating a new criminal offense tied to prediction market manipulation.
Tennessee Gov. Bill Lee has signed two gambling-related bills into law, including legislation banning online sweepstakes casinos and another creating a new criminal offense tied to prediction market manipulation.
Sweepstakes Casino Ban Becomes Law
Gov. Lee signed SB 2136 after it passed both chambers in April, following several amendments and conference committee negotiations.
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.
The definition covers casino-style games, including slots, table games, bingo, lottery-style games, video poker, and unlicensed sports wagering.
Violations are treated as breaches of the Tennessee Consumer Protection Act of 1977, which allows for civil enforcement in addition to existing gambling laws.
Tennessee Creates Prediction Market Manipulation Offense
Gov. Lee also signed SB 1992, establishing a new felony offense related to prediction market manipulation.
Under the law, a person commits an offense by intentionally influencing the outcome of an event while participating in a prediction market contract tied to that outcome. Violations are classified as a Class E felony.
With the measure, Tennessee becomes one of the first states to enact a law targeting prediction market integrity and manipulation.
Last week, Minnesota enacted two bills related to prediction markets. That includes a ban on several event categories, which prompted the CFTC to sue the state in federal court. The agency argued that Minnesota’s law could improperly affect federally regulated derivatives markets beyond sports-event contracts.
States Continue Expanding Sweepstakes Enforcement
Tennessee joins a growing list of states that have enacted laws targeting sweepstakes casinos in 2026. Indiana led the way in March, with Maine following at the beginning of April.
More states followed this month.
In Oklahoma, the Legislature overrode Gov. Kevin Stitt’s veto of SB 1589, officially enacting a ban on “online casino games” where users risk a “representative of value”.
Last week, Louisiana enacted two bills. HB 883 directly targets sweepstakes casinos and dual-currency payment systems. Meanwhile, HB 53 updates racketeering statutes to include electronic sweepstakes devices.
Furthermore, last week, Iowa enacted SF 2289. The law expands regulatory authority to pursue illegal sweepstakes and other unlicensed gambling operators through cease-and-desist orders and injunctive relief.
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