Tennessee has become the latest state to square off against prediction market firms.
On Jan. 9, the Tennessee Sports Wagering Council sent cease and desist letters to Kalshi, Polymarket, and Crypto.com ordering them to stop offering sports event contracts.
The regulator demanded the companies refund deposits and void open contracts in the Volunteer State by Jan. 31. The companies do not have licenses to offer sports betting in the state, regulators wrote.
Latest Effort To Curtail Sports Prediction Markets
The letters said that violations of state sports betting laws could bring civil penalties of up to $25,000 per infraction. The council also threatened criminal charges for felony aggravated gambling promotion.
Prediction markets continue to be a source of contention among gaming regulators. Some states view the platforms as illegal sports betting, including Nevada and New Jersey, and have ordered the platforms to stop offering sports markets.
Companies like Kalshi, however, argue that they are not sportsbooks and are regulated solely by the Commodity Futures Trading Commission. Consequently, the company fought back against state regulators blocking their platform.
In every instance where state regulators push back against Kalshi’s offerings, they respond with the same move. A lawsuit of their own.
Kalshi responds with a suit requesting a temporary restraining order, allowing them to continue offering their services while the legal battle ensues. This also happened in Tennessee, and the company received the TRO request from a judge. Thus, Kalshi will continue offering sports contracts until the a judge rules on whether its offerings are legal in Tennessee.
Kalshi recently signed a deal with CNN and named poker legend Daniel Negreanu as an ambassador.
In September, federal legislators circulated a draft letter outlining some of their concerns about sports prediction markets to the CFTC. Those included compliance with betting age requirements and other issues that legal sportsbooks must deal with.
The letter questioned whether the offerings are simply an end-run around state sports betting laws.
