Tennessee Regulator Sends Cease-And-Desist Letters To Polymarket, Kalshi, Crypto.com — Details
Tennessee’s sports activities betting regulator has ordered Polymarket, Kalshi, and Crypto.com to stop providing sports activities betting contracts, bringing focus to the regulatory panorama of occasion contract exchanges. The company accused the three main prediction market platforms of violating state playing legal guidelines by working in Tennessee with out the required licenses.
Polymarket, Others Threatened With Fines For Offering Sports Event Contracts
On Friday, January 9, the Tennessee Sports Wagering Council (SWC) issued cease-and-desist letters to Polymarket, Kalshi, and Crypto.com’s Derivatives Exchange. In the letters, the state regulator requested all three prediction market corporations to cease providing sports activities occasion contracts to the residents of Tennessee.
The state’s SWC additionally demanded that the three corporations void all pending contracts entered into by Tennessee residents, and refund all buyer deposits by January 31, 2026.
SWC Executive Director, Mary Beth Thomas, wrote within the letter to Polymarket:
The sports activities occasions contracts supplied on Polymarket’s alternate usually are not compliant with these [Tennessee state consumer] protections (and lots of others) and are an instantaneous and important risk to the general public curiosity of Tennessee.
The language within the Tennessee Sports Wagering Council letters to Kalshi and Crypto.com was fairly much like Polymarket’s cease-and-desist letter. This comes regardless of all three platforms being registered as designated contract markets with the Commodity Futures Trading Commission (CFTC), permitting them to supply event-based derivatives contracts nationwide.
Despite this CFTC designation, these prediction market corporations have had regulatory run-ins with completely different states within the US. In December 2025, the state of Connecticut despatched a trio of cease-and-desist orders to Robinhood, Kalshi, and Crypto.com. The corporations primarily based their protection on the time on receiving the CFTC’s approval to function within the United States.
This Tennessee cease-and-desist order appears to be the primary state-level regulatory situation confronted by Polymarket, which at the moment solely provides sports activities occasion contracts within the United States. In the letters, the Tennessee Sports Wagering Council threatened a variety of penalties for any of the corporations’ failure to conform.
One of the letters additional learn:
Failure to adjust to the SWC’s demand will consequence within the imposition of fines pursuant to the Act, which states that the SWC shall impose a high-quality in opposition to any individual providing wagers in Tennessee and not using a license within the quantity of $10,000 for the primary offense; $15,000 for a second offense; and $25,000 for a 3rd or subsequent offense. ‘ Moreover, failure to adjust to the SWC’s demand will consequence within the SWC searching for injunctive reduction.
Prediction Markets Facing Increased Regulatory Scrutiny
The prediction markets, which gained prominence through the 2024 US elections, have continued to get pleasure from curiosity from customers and institutional buyers. However, the regulatory scrutiny confronted by the business has seen the same surge these days.
For occasion, a Polymarket dealer reportedly netted file features of over $400,000 from predicting the current US navy motion in Venezuela, prompting talks of introducing a invoice to forestall insider buying and selling. As Bitcoinist reported, Rep. Ritchie Torres (D-N.Y.) plans to introduce a invoice that might ban all government-affiliated people from collaborating in state-related occasions within the prediction market.
