Tennessee's Sports Wagering Council recently took decisive action against Kalshi, Polymarket, and Crypto.com by issuing cease-and-desist orders. The council, responsible for overseeing regulations related to online sports betting and fantasy sports, accused these companies of violating state gambling laws by offering unauthorized sports contracts in Tennessee.
According to the council, the provision of contracts that allow users to wager on the outcomes of sporting events meets the legal definition of sports wagering, irrespective of how these contracts are marketed, such as prediction markets or derivatives. Operating such products in Tennessee necessitates a state-issued license, along with compliance with necessary consumer protection and tax regulations. Nonetheless, the companies in question have been operating without the required authorizations.
Each platform has been instructed to immediately suspend their offerings for sports contracts to Tennessee residents, cancel any outstanding contracts, and process refunds for user balances by the end of January. The Tennessee Sports Wagering Council has indicated that failure to comply could result in escalated fines and possible legal action. While Kalshi and Polymarket are recognized as federally regulated platforms under CFTC supervision, Crypto.com primarily functions as a cryptocurrency exchange but also incorporates prediction market features into its offerings.