Tennessee Governor Bill Lee has signed new gambling laws, banning online sweepstakes casinos and creating a new felony for prediction market manipulation.
Key Takeaways
* Tennessee has officially banned online sweepstakes casinos, defining them broadly to include various casino-style games.
* A new Class E felony offense has been established in Tennessee for manipulating prediction market outcomes.
* Tennessee joins a growing number of states enacting legislation to curb or regulate online sweepstakes and unlicensed gambling operations.
Tennessee’s gambling landscape is undergoing a notable shift following Governor Bill Lee’s signing of two pivotal bills into law. These legislative actions directly impact online gaming, specifically targeting online sweepstakes casinos and establishing new regulations for prediction markets.
Online Sweepstakes Casinos Outlawed in Tennessee
Governor Lee’s signature on SB 2136 officially bans online sweepstakes casinos in Tennessee. This legislation, passed in April, defines “online sweepstakes games” as internet-based platforms using virtual or dual-currency systems. Users obtain digital currency via purchases, bonuses, or promotions, then exchange it for prizes or cash equivalents.
The definition broadly 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, allowing for civil enforcement in addition to existing gambling laws. This aims to protect consumers from unregulated gaming offerings.
New Felony for Prediction Market Manipulation
Governor Lee also signed SB 1992, introducing a new felony offense for prediction market manipulation. Under this law, intentionally influencing an event’s outcome while participating in a prediction market contract tied to that outcome constitutes a Class E felony.
Tennessee is now among the first states to implement legislation specifically addressing prediction market integrity. This follows Minnesota’s recent enactment of two prediction market bills, one of which banned several event categories. This ban prompted the Commodity Futures Trading Commission (CFTC) to sue Minnesota, arguing the law could affect federally regulated derivatives markets beyond sports.
States Intensify Sweepstakes Enforcement
Tennessee’s actions are part of an accelerating national trend to regulate or ban online sweepstakes casinos. Indiana led this effort in March, with Maine following in early April.
Further legislative actions continued this month. Oklahoma’s Legislature overrode Governor Kevin Stitt’s veto of SB 1589, banning “online casino games” where users risk a “representative of value.” Last week, Louisiana enacted two bills: HB 883 directly targets sweepstakes casinos and their dual-currency systems, while HB 53 updates racketeering statutes to include electronic sweepstakes devices.
Additionally, Iowa enacted SF 2289 last week, expanding regulatory authority to pursue illegal sweepstakes and other unlicensed gambling operators through cease-and-desist orders and injunctive relief. These collective state actions signal a clear commitment to establishing clearer boundaries for online gambling and maintaining the integrity of regulated gaming environments.
I remember the first time I saw Kai Tak, Hong Kong’s gambling city, I thought I was in a fairy tale. All the lights blinking, the music and the monumental buildings, what 9-year-old wouldn’t think they’ve come to a magical place? It was my father who brought me, dragging me along and when inside I was hit by the smell of frying duck. As soon as I hit 21 I returned to Kai Tak, A bit nervous to see if my mind had embellished the memory, but it hadn’t. Kai Tak was still a magical place. I decided I wanted to spend as much time as I could at this place, so I did.
