Tennessee targets Kalshi, Polymarket, and Crypto.com over sports betting

Key Takeaways

Tennessee’s Sports Wagering Committee has issued cease-and-desist orders to Kalshi, Polymarket, and Crypto.com.
Regulators want the companies to immediately stop offering sports contracts in Tennessee.

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The Tennessee Sports Wagering Council (SWC), which oversees the regulation and licensing of online sports betting and fantasy sports, has issued formal cease-and-desist demands to Kalshi, Crypto.com, and Polymarket, accusing the platforms of violating state gambling laws by offering sports-related contracts without authorization.

The orders were first reported by sports betting attorney Daniel Wallach on X.

BREAKING: Tennessee Sports Wagering Council sends cease-and-desist letters to Kalshi (📸), Polymarket and Crypto, demanding that they cease offering sports event contracts to TN customers immediately, void all pending contracts and issue refunds by Jan. 31. Lawsuits are imminent. pic.twitter.com/jDIPIwsrCn

— Daniel Wallach (@WALLACHLEGAL) January 9, 2026

The regulator contends that allowing users to risk money on the outcome of sporting events meets the statutory definition of sports wagering, regardless of whether the products are described as prediction markets or derivatives.

According to the letters, operating such products in Tennessee requires a state license and compliance with consumer-protection and tax obligations, which the council says the companies lack.

Tennessee directed each platform to halt sports contract offerings to Tennessee residents, cancel existing contracts, and refund user balances by January 31. The state also warned that continued operations could trigger escalating fines and court action.

Kalshi and Polymarket both operate as federally regulated prediction market platforms under CFTC oversight, enabling users to trade contracts on various real-world outcomes. Crypto.com, primarily a crypto exchange, also offers prediction market features.