Tennessee Regulator Clamps Down on Polymarket, Kalshi, and Crypto.com Over Sports Betting

Tennessee's Sports Wagering Council (SWC) has escalated regulatory pressure on prediction markets, issuing cease-and-desist orders to three major platforms. Polymarket, Kalshi, and Crypto.com's Derivatives Exchange face allegations of offering unlicensed sports event contracts to state residents.

The January 9th enforcement action demands immediate termination of Tennessee-facing operations, voiding of pending contracts, and full customer refunds by January 2026. SWC Executive Director Mary Beth Thomas emphasized non-compliance with state consumer protections, calling the platforms' activities "an immediate and significant threat to public interest."

This crackdown highlights growing tension between decentralized prediction markets and traditional gambling regulators. Notably affected are crypto-native platforms like Polymarket, which have gained traction among digital asset traders seeking alternative derivatives exposure.