U.S. Federal Judge Temporarily Halts Tennessee's Ban on Kalshi

Odaily News A U.S. federal judge has temporarily halted Tennessee's enforcement action that would have forced prediction market operator Kalshi to shut down its sports event contracts in the state, freezing a cease-and-desist order. The court will consider whether the company's platform, regulated by the U.S. Commodity Futures Trading Commission (CFTC), should be exempt from state gambling laws. According to an order signed on Monday, the ruling suspends enforcement actions by the Tennessee Sports Wagering Committee and the state's Attorney General. Previously, regulators had ordered Kalshi, Polymarket, and Crypto.com to stop offering sports-related contracts to Tennessee residents and to void open contracts and refund customer deposits by January 31. Tennessee officials initially also warned that non-compliance could result in fines of up to $25,000 per violation and potential referral to law enforcement. Kalshi countered that the dispute is a jurisdictional conflict between state gambling enforcement and federal commodity law. In its federal complaint, the company stated that Tennessee's move infringes on the CFTC's "exclusive jurisdiction" over derivatives trading on designated exchanges and argued that the state's threatened enforcement action is preempted by the Commodity Exchange Act. (The Block)