Tennessee’s sports activities betting regulator has ordered prediction market platforms Kalshi, Polymarket and Crypto.com to halt the providing of sports activities occasion contracts to residents of the state.
In cease-and-desist letters dated Friday, the Tennessee Sports activities Wagering Council (SWC) accused all three platforms of illegally providing sports activities wagering merchandise with out holding a license issued below the Tennessee Sports activities Gaming Act, in line with copies of the letters printed on X by sports activities betting lawyer Daniel Wallach.
The SWC mentioned the sports activities occasion contracts listed on Kalshi, Polymarket and Crypto.com’s North American Derivatives Trade permit customers to wager cash on the end result of sporting occasions, a follow Tennessee regulation reserves completely for licensed sportsbooks. The regulator argued that packaging the merchandise as “occasion contracts” doesn’t exempt them from state playing statutes.
The regulator additionally pointed to shopper safety necessities imposed on licensed operators, together with age restrictions, accountable gaming instruments and anti-money laundering controls, which it says are absent from the platforms’ choices.
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Tennessee orders prediction markets to subject refunds
The SWC ordered the businesses to instantly cease providing sports-related contracts to Tennessee residents, void all present contracts entered into by customers within the state and refund all funds on deposit by Jan. 31, 2026.
Failure to conform may end in fines of as much as $25,000 per offense, in line with the letters. The regulator additionally warned that continued noncompliance may result in injunctive reduction and referrals to regulation enforcement for additional investigation into unlawful playing operations.
Whereas Kalshi and Polymarket are registered with the US Commodity Futures Buying and selling Fee (CFTC), the SWC maintained that federal registration doesn’t override Tennessee’s authority to manage sports activities wagering inside its borders.
Cointelegraph reached out to Kalshi, Polymarket and Crypto.com for remark however had not acquired a response by publication.
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Choose briefly blocks Connecticut from imposing order towards Kalshi
Final month, a US federal choose briefly barred Connecticut regulators from imposing a cease-and-desist order towards Kalshi, granting the corporate a short-term reprieve because the authorized dispute strikes ahead. The order follows motion by the Connecticut Division of Shopper Safety, which accused Kalshi, Robinhood and Crypto.com of providing unlicensed sports activities wagering by way of on-line occasion contracts.
Kalshi challenged the state’s transfer in courtroom, arguing that its occasion contracts fall below federal commodities regulation and are regulated completely by the CFTC. Choose Vernon Oliver dominated that Connecticut should pause enforcement whereas the courtroom considers Kalshi’s request for a preliminary injunction, setting deadlines for filings in January and scheduling oral arguments for mid-February.
The case provides to a rising authorized combat between Kalshi and state regulators nationwide, as a number of states have questioned whether or not prediction market contracts tied to sports activities represent unlawful playing. Kalshi has launched lawsuits towards regulators in New York, Massachusetts, New Jersey, Nevada, Maryland and Ohio.
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