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 underneath the Tennessee Sports activities Gaming Act, in response to copies of the letters revealed on X by sports activities betting legal professional Daniel Wallach.
The SWC stated the sports activities occasion contracts listed on Kalshi, Polymarket and Crypto.com’s North American Derivatives Alternate permit customers to wager cash on the end result of sporting occasions, a follow Tennessee regulation reserves solely 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 challenge 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 response to 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 function underneath federal commodities regulation and have had dealings with the US Commodity Futures Buying and selling Fee (CFTC), the SWC maintained that federal oversight doesn’t override Tennessee’s authority to control 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 implementing order towards Kalshi
Final month, a US federal decide briefly barred Connecticut regulators from implementing 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 court docket, arguing that its occasion contracts fall underneath federal commodities regulation and are regulated solely by the CFTC. Choose Vernon Oliver dominated that Connecticut should pause enforcement whereas the court docket 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 struggle 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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