Tennessee Gov. Bill Lee has signed two gambling-related bills into law. One bans online sweepstakes casinos, while the other creates a new criminal offence tied to prediction market manipulation.
The measures put Tennessee among U.S. states adding tougher rules for alternative gambling products. They also show how lawmakers are treating sweepstakes casinos and prediction markets as separate but related enforcement issues.
Sweepstakes casino ban becomes law
The sweepstakes bill bans online games that use virtual or dual-currency systems and allow users to exchange credits for cash, prizes or cash equivalents. The definition covers casino-style products such as slots, table games, bingo, video poker and lottery-style games.
Violations will be treated as breaches of the Tennessee Consumer Protection Act. That gives state officials another way to act against operators offering sweepstakes-style gambling products to Tennessee users. The law follows earlier action from the Tennessee Attorney General’s office, which sent cease-and-desist letters to sweepstakes operators. Several companies later restricted access or prepared to leave the state.
Prediction market manipulation becomes a felony
Lee also signed a bill creating a new offence for prediction market manipulation. The law targets people who try to change the result of an event while holding a prediction market contract tied to that event.
Violations are classified as a Class E felony. The measure was promoted after concerns that users could create or affect real-world events and then profit from contracts based on those outcomes.
The bill does not ban prediction markets outright. Instead, it focuses on cases where a person helps influence the result and then benefits from the settlement of a contract.
State enforcement keeps expanding
Tennessee’s sweepstakes ban comes during a wider state crackdown on dual-currency casino platforms. Indiana, Maine, Oklahoma, Louisiana and Iowa have all moved on similar measures this year.
Some laws directly ban sweepstakes casino products, while others give regulators more authority to pursue illegal gambling or update enforcement tools. Tennessee’s measure uses consumer protection law as part of that approach.
Prediction markets face separate legal pressure
Prediction market rules are moving on a different track from sweepstakes bans. States are challenging sports-event contracts, while the CFTC oversees event markets listed on federally regulated exchanges.
Tennessee has also been involved in the wider prediction market dispute through legal action linked to sports contracts. Its new manipulation law adds a state-level integrity offence without directly deciding whether event contracts are gambling products.
