Tennessee's Sports Wagering Council issued cease-and-desist orders to Kalshi, Polymarket, and Crypto.com, demanding they halt sports event contracts in Tennessee by January 31, 2026.
This regulatory action highlights state-level control over online sports betting and its potential impact on the cryptocurrency platforms involved, signaling challenges in navigating jurisdictional compliance.
The Tennessee Sports Wagering Council has directed Kalshi, Polymarket, and Crypto.com to stop offering sports betting contracts to state residents. The ruling demands that these companies void existing contracts and process user refunds by January 31, 2026.
The cease-and-desist letters were confirmed by postings from sports betting attorney Daniel Wallach. The council's actions are rooted in the absence of a Tennessee sports wagering license for the platforms, equating their activities to unlawful sports betting.
Tennessee Sports Wagering Council Halts Crypto Contracts
The Tennessee Sports Wagering Council has directed Kalshi, Polymarket, and Crypto.com to stop offering sports betting contracts to state residents. The ruling demands that these companies void existing contracts and process user refunds by January 31, 2026.
The cease-and-desist letters were confirmed by postings from sports betting attorney Daniel Wallach. The council's actions are rooted in the absence of a Tennessee sports wagering license for the platforms, equating their activities to unlawful sports betting.
Platforms Face Specific Financial and Regulatory Consequences
Tennessee's decision imposes regulatory and financial ramifications for these platforms. The targeted companies are expected to face regional revenue impacts and potential compliance costs but not a substantial financial shock. Kalshi, being a CFTC-regulated platform, offers products that remain unaffected outside Tennessee. Daniel Wallach, Sports Betting Attorney, remarked:
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.
Historical trends suggest that such regulatory actions lead to regional suspensions rather than widespread platform closures. The absence of pronounced social media commentary indicates community sees it as a localized issue. Sentiment for USDC and CRO might experience minor fluctuations, influenced by perceived U.S. regulatory risks.
Scrutiny on Unlicensed Prediction Markets Persists
Previous U.S. regulatory challenges, such as CFTC actions against Kalshi for political event contracts, underscore ongoing scrutiny. Both CFTC and state bodies have historically taken a strong stance towards unlicensed prediction markets and sports contracts.
Analysis indicates existing regulatory frameworks could continue to tighten around event contracts. Platforms might increasingly use geo-fencing and emphasize compliance through CFTC-regulated venues to mitigate the risks posed by state-level interventions.
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