Tennessee sends stop-and-desist letters to Kalshi, Polymarket, Crypto.com
Private eye
Tennessee’s sports having a wager regulator has ordered prediction market platforms Kalshi, Polymarket and Crypto.com to pause the offering of sports tournament contracts to residents of the teach.
In stop-and-desist letters dated Friday, the Tennessee Sports Wagering Council (SWC) accused all three platforms of illegally offering sports wagering products without holding a license issued below the Tennessee Sports Gaming Act, in accordance with copies of the letters revealed on X by sports having a wager authorized legitimate Daniel Wallach.
The SWC acknowledged the sports tournament contracts listed on Kalshi, Polymarket and Crypto.com’s North American Derivatives Alternate allow users to wager cash on the tip consequence of wearing events, a practice Tennessee law reserves exclusively for licensed sportsbooks. The regulator argued that packaging the products as “tournament contracts” does not exempt them from teach playing statutes.
The regulator also pointed to user protection requirements imposed on licensed operators, including age restrictions, to blame gaming instruments and anti-cash laundering controls, which it says are absent from the platforms’ offerings.
Tennessee sends stop-and-desist letters to prediction market platforms. Source: Daniel Wallach
Private eye Tennessee orders prediction markets to discipline refunds
The SWC ordered the companies to appropriate away stop offering sports-linked contracts to Tennessee residents, void all novel contracts entered into by users in the teach and refund all funds on deposit by Jan. 31, 2026.
Failure to conform could presumably well additionally lead to fines of as a lot as $25,000 per offense, in accordance with the letters. The regulator also warned that continued noncompliance could presumably well additionally lead to injunctive relief and referrals to law enforcement for additional investigation into illegal playing operations.
Whereas Kalshi and Polymarket operate below federal commodities law and recognize had dealings with the US Commodity Futures Buying and selling Commission (CFTC), the SWC maintained that federal oversight does not override Tennessee’s authority to preserve watch over sports wagering inner its borders.
Cointelegraph reached out to Kalshi, Polymarket and Crypto.com for comment but had not got a response by publication.
Resolve temporarily blocks Connecticut from imposing mumble against Kalshi
Final month, a US federal prefer temporarily barred Connecticut regulators from imposing a stop-and-desist mumble against Kalshi, granting the firm a non eternal reprieve as the suitable dispute strikes forward. The mumble follows motion by the Connecticut Division of User Safety, which accused Kalshi, Robinhood and Crypto.com of offering unlicensed sports wagering through online tournament contracts.
Kalshi challenged the teach’s circulate in court, arguing that its tournament contracts tumble below federal commodities law and are regulated exclusively by the CFTC. Resolve Vernon Oliver ruled that Connecticut must terminate enforcement whereas the court considers Kalshi’s quiz for a preliminary injunction, setting closing dates for filings in January and scheduling oral arguments for mid-February.
The case provides to a rising appropriate fight between Kalshi and teach regulators nationwide, as several states recognize puzzled whether prediction market contracts tied to sports list illegal playing. Kalshi has launched complaints against regulators in Unique York, Massachusetts, Unique Jersey, Nevada, Maryland and Ohio.
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