Tennessee regulators issue cease-and-desist letters to Kalshi and two other platforms, demanding they stop offering sports prediction markets

Odaily Planet Daily News The Tennessee Sports Wagering Council issued cease-and-desist letters on January 9 to prediction market platforms Kalshi, Polymarket, and Crypto.com, ordering them to stop offering sports-related prediction market products to Tennessee residents, void unsettled contracts, and return customer funds. The Council determined that the products constitute sports wagering, and the platforms must comply with state licensing, taxation, age restrictions, and consumer protection requirements.

Kalshi stated that its event contracts are financial instruments regulated by the Commodity Futures Trading Commission (CFTC) and are not subject to state sports wagering regulations. Users buy and sell contracts, and the contract prices reflect the market's implied probabilities; when an event occurs, winning contracts settle at $1, while losing contracts settle at zero.

Traditional sportsbooks typically accept user bets and manage risk by setting odds, whereas Kalshi facilitates trading between users, with the platform acting as an intermediary and prices formed by buyers and sellers. The dispute centers on whether sports prediction markets should be subject to a unified federal regulatory framework or individual state-level wagering licensing regimes. (Bitcoin.com News)