Each company operates as designated contract markets registered with the Commodity Futures Trading Commission (CFTC), but according to regulators, the state’s Sports Gaming Act requires the firms to hold state licenses, of which none of the companies have.
Said the letter to Kalshi:
Accordingly, the sports events contracts offered on Kalshi’s exchange are Wagers under the Act and are being offered illegally in violation of Tennessee law and regulations.
The regulator says that failure to comply with the demand will result in several fines and the referral to law enforcement for further investigation.
One unknown entity was spotted turning $30,000 into $400,000 as the US invasion and subsequent regime change in Venezuela unfolded.
FAQ Why did Tennessee issue cease-and-desist letters? Tennessee’s Sports Wagering Council says the prediction market contracts offered by Kalshi, Crypto.com and Polymarket are illegal “wagers” under state sports gambling law because the firms aren’t licensed to operate sportsbooks in the state. TechStory How does Tennessee classify these products? Regulators view sports-linked event contracts as unlicensed gambling, not just federally regulated financial products, and demand platforms stop offering them to Tennessee users. FinanceFeeds What must the companies do to comply? The companies have been ordered to halt new contracts, void existing ones, and refund Tennessee customers by Jan. 31 or face fines and enforcement actions. TechStory Why is there a legal dispute? The platforms argue they are regulated federally by the Commodity Futures Trading Commission as derivatives markets, but Tennessee insists state gambling laws still apply for sports-related betting contracts.
