Tennessee Regulators Shutter Prediction Markets in Sports Betting Clampdown

Tennessee's Sports Wagering Council has issued cease-and-desist orders against Kalshi, Polymarket, and Crypto.com, demanding an immediate halt to sports-related prediction contracts in the state. Regulators classified these platforms as unlicensed gambling operators, citing violations of consumer protection standards and tax requirements.

The January 9 orders mandate voiding all active sports contracts for Tennessee users and refunding deposits by January 31, 2026. Non-compliance risks escalating penalties, including fines and criminal liability. The MOVE reflects growing regulatory tensions around prediction markets—particularly those involving cryptocurrencies—as states increasingly treat them as gambling rather than financial derivatives.

Notably absent from the council’s action were decentralized platforms, suggesting regulators may be prioritizing centralized entities with identifiable operators. The decision could set a precedent for other states scrutinizing crypto-based betting products.