Tennessee Sweepstakes Casino Ban Joined by Prediction Market Manipulation Felony Law

Lee Signs SB 2136 and SB 1992 connected Final Day of 10-Day Decision Window

Tennessee Gov. Bill Lee signed 2 pieces of gambling authorities connected Friday, May 22, the last time of his 10-day determination model after the bills were sent to his table connected May 11. SB 2136 bans online sweepstakes casinos operating successful the state, portion SB 1992 establishes a caller Class E felony discourtesy for prediction market manipulation. The legislature had passed some bills connected April 23, the last time of its session, pursuing months of negotiations and a league committee compromise.

SB 2136 prohibits “online sweepstakes games” that utilize virtual currency systems, allowing participants to speech currency for currency oregon currency prizes. The instrumentality covers a wide scope of casino-style products, including slots, array games, bingo, lottery-style games, video poker, and unlicensed sports wagering. Tennessee Attorney General Jonathan Skrmetti had already issued cease-and-desist letters earlier this twelvemonth that pushed large operators retired of the Tennessee market. The signing present codifies the enforcement world that the AG’s bureau had imposed done ineligible pressure.

SB 1992 creates a circumstantial Class E felony for individuals who intentionally power the result of an lawsuit portion participating successful a prediction market declaration tied to that outcome. The instrumentality follows Tennessee’s earlier effort to propulsion Kalshi retired of the authorities done civilian enforcement: authorities regulators had issued a cease-and-desist missive ordering the prediction market level to halt sports lawsuit contracts, but Kalshi countersued and won a national preliminary injunction connected February 19, allowing it to proceed operating. The caller criminal-liability statute adds an enforcement furniture that the civilian lawsuit could not deliver, though it targets idiosyncratic behaviour alternatively than level operations themselves.

The signing concludes a 10-day determination model for Lee. Alongside signing the bills oregon straight vetoing them, the politician besides had the enactment to fto the bills go instrumentality without signature, which would person produced the aforesaid ineligible result but distanced the politician from the argumentation choice.

With the signing, Tennessee becomes the seventh U.S. authorities to enact a sweepstakes casino ban. Indiana and Maine person besides moved against the dual-currency exemplary successful 2026, with Louisiana enacting HB 883 connected May 15. The combined state-level gait reflects regulatory statement that sweepstakes platforms relation arsenic unlicensed casino operators contempt their promotional sweepstakes framing.

On the prediction-markets side, Tennessee’s instrumentality arrives wrong a broader national preemption fight. Minnesota enacted 2 prediction-market bills past week, prompting a CFTC suit against the authorities connected May 19. Last week’s Senate Commerce Subcommittee proceeding connected prediction markets and sports betting besides brought renewed national scrutiny. Tennessee’s prime to prosecute transgression liability alternatively than nonstop level bans whitethorn bespeak lessons from the February Kalshi injunction loss, arsenic targeting idiosyncratic behaviour alternatively than level operations arsenic its chosen ineligible posture whitethorn look less preemption challenges.