The Tennessee Sports Wagering Council ordered prediction market platforms Kalshi, Polymarket and Crypto.com to stop offering sports event contracts to state residents in cease-and-desist letters dated Friday, citing unlawful sports wagering and requiring action immediately, according to copies of the letters published on X. The regulator said the products let users wager on sporting outcomes, a practice reserved for licensed sportsbooks under state law.
The SWC said labeling the offerings as “event contracts” does not exempt them from Tennessee gambling statutes and pointed to missing consumer protections such as age verification, responsible gaming tools and anti-money laundering controls. It argued those safeguards are required of licensed operators.
The council ordered the companies to stop sales to Tennessee residents, void current contracts held by in-state users and refund all deposits by Jan. 31, 2026. The letters warned of fines up to $25,000 per offense and possible injunctive relief or law enforcement referrals for continued noncompliance.
While Kalshi and Polymarket have operated under federal commodities rules and engaged with the CFTC, the SWC maintained federal oversight does not override Tennessee’s authority over sports wagering within its borders. A federal judge recently paused Connecticut’s enforcement of a similar order against Kalshi, and the company has active legal challenges in several states including New York, Massachusetts, New Jersey, Nevada, Maryland and Ohio.
