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Read Full BioTennessee’s Sports Wagering Council (SWC) has sent cease-and-desist letters to Kalshi, Polymarket, and Crypto.com, arguing that the sports event contracts they offer to residents in the state amount to unlicensed sports wagering under Tennessee law.
In the letters, dated January 9, 2026, the regulator says it’s the authority that’s responsible for enforcing “the laws and rules relating to wagering on sporting events” in the state and that offering sports wagering is “a taxable privilege” that requires a state license.
The SWC has directed all three companies to immediately stop offering sports contracts in the state, void all existing positions, and refund customers by January 31. Failure to do so will result in fines of $10,000 for the first offense, $15,000 for the second offense, and $25,000 for the third or “subsequent offense” in accordance with the Tennessee Sports Gaming Act, according to the letter. The Council goes on to write that failure to comply “will result in the SWC seeking injunctive relief…”
In response to the letter, Kalshi spokesperson Elisabeth Dina told CasinoBeats, “As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it’s subject to exclusive federal jurisdiction. It is very different from what state-regulated sportsbooks and casinos offer their customers.
“Tennessee has nevertheless sought to regulate Kalshi under state law. It sent us a cease-and-desist letter earlier today, and we have now brought suit in federal court to stop this unlawful attempt.”
Polymarket and Crypto.com did not immediately respond to requests for comment.
This isn’t the first time the SWC has taken exception with prediction markets. In April 2025, the regulator sent a letter to the Commodity Futures Trading Commission expressing its opposition to the sports event contracts being offered by prediction markets in the state.
Letters Explain Why Tennessee Views This as Sports Wagering
The letters detail why the sports contracts offered by Kalshi, Polymarket, and Crypto.com are considered sports wagering under Tennessee law. They first define interactive sports wagering as “placing a wager on a sporting event via the internet, a mobile device, or telecommunications platform,” before laying out what qualifies as a sporting event: “motorsports, esports, any collegiate sporting or athletic event, or any Olympic sporting or athletic event sanctioned by a national or international organization or association.”
Using that framework, the SWC accuses the sports event contracts offered by Kalshi, Polymarket, and Crypto.com of functioning as wagers because they involve “a sum of money that is risked by a bettor on the unknown outcome” of a sporting event, with money ultimately being “won or lost based on the outcome of a game.” By accepting these types of wagers and operating without a license, the letter states that the prediction markets are in violation of the Tennessee Sports Gaming Act.
The SWC also alleges that the contracts bypass Tennessee’s regulatory framework for licensed sportsbooks, including age restrictions, anti-money laundering requirements, and responsible gambling protections. It goes on to state that even if these protections were in place, the companies “do not have the required license issued by the SWC” and therefore are operating unlawfully in the state.
Other States Have Issued Similar Orders
Tennessee’s actions against the CFTC-regulated platforms, including Kalshi, Polymarket, and Crypto.com, come at a time when states are increasingly cracking down on prediction market platforms.
To date, regulators in 10 states have issued cease-and-desist orders against Kalshi: Arizona, Connecticut, Illinois, Maryland, Montana, Nevada, New Jersey, New York, Ohio, and now Tennessee. Kalshi has responded by filing multiple lawsuits, arguing that, as a CFTC-regulated contract market, its event contracts fall under federal “exclusive jurisdiction,” and the Commodity Exchange Act preempts state efforts to treat the products as sports wagering.
Several state regulators have also issued cease-and-desist orders to Crypto.com, including a March 2025 order from Ohio’s Casino Control Commission that was also sent to Kalshi and Robinhood. Other states that have issued similar orders include Arizona, Connecticut, Nevada, New Jersey, Illinois, Maryland, and now Tennessee, for a total of at least eight cease-and-desist orders against the prediction market. Like Kalshi, Crypto.com has pushed back through litigation on the grounds that its CFTC-regulated derivatives are outside the scope of state gambling authority.
The cease-and-desist order Polymarket received on January 9 from the Tennessee Sports Wagering Council is the first one it has received since its return to the U.S. market in late 2025 following a multi-year CFTC settlement and reentry process.
