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Tennessee is trying a new tactic in the prediction market fight: don’t just chase the platforms, go after anyone who tries to rig the outcome while holding a position.
State Sen. Ferrell Haile has filed SB 1992, a bill that would make it a crime to influence an event’s outcome while the person (or someone else) is party to a prediction-market contract that would benefit from that result. The proposal would classify a violation as a Class E felony, Tennessee’s lowest felony tier.
Tennessee continues to keep a strong hold on the prediction market
The bill was timed right after the Tennessee Sports Wagering Council tried to force several event-contract operators out of the state, arguing that sports event contracts look like unlicensed sports betting under Tennessee law.
That enforcement push then ran into a roadblock in federal court. Kalshi sued Tennessee officials, including Attorney General Jonathan Skrmetti, and a judge issued a temporary restraining order that blocked the state from enforcing the cease-and-desist against Kalshi while the case continues.
What a Class E felony means here
SB 1992 doesn’t create a new regulator or a new licensing track. It’s a criminal add-on aimed at manipulation itself.
In Tennessee, a Class E felony can carry one to six years in prison and fines up to $3,000, depending on sentencing range and case specifics.
This is spreading beyond Tennessee
Tennessee isn’t the only place where lawmakers are suddenly nervous about event contracts and the incentives they create.
At the federal level, New York Rep. Ritchie Torres has introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would bar covered officials from trading prediction-market contracts.
In New York State, Assembly Bill A9635 would restrict public officers from using prediction markets or mobile sports wagering platforms when using information they obtained through official duties.
And in the background, the messaging war is heating up too. The Coalition for Prediction Markets recently went public with a full-page ad buy in The Washington Post, pitching registered markets as transparent and pushing for clearer rules.
That “clearer rules” point matters because the Commodity Futures Trading Commission has also signaled it plans to publish new event-contract regulations.
The bill moves ahead, pending decision from the court
SB 1992 is now in the Tennessee legislative pipeline, and it’s best read as a warning shot: even if the courts ultimately decide who regulates event contracts, Tennessee lawmakers want a separate tool for the ugliest risk, manipulation while money is on the line.
Source: SBC Americas
