Tennessee Sends Cease-and-Desists to Kalshi, Polymarket, Crypto.com
The Tennessee Sports Wagering Council (SWC) sent cease-and-desist letters to Kalshi, Polymarket, and Crypto.com on Jan. 9, ordering the prediction platforms to stop offering sports betting contracts in the state.
Prediction Platforms Are Not Licensed In Tennessee
Tennessee’s SWC sent the letters individually to Tarek Mansour, CEO of Kalshi; Kevin J. Dan, chief compliance officer and chief regulatory officer of Crypto.com; and to Polymarket.
In the Volunteer State, “Interactive sports wagering” is defined as “placing a wager on a sporting event contract via the internet, a mobile device, or other telecommunication platform.”
The SWC made it clear that “Interactive sports wagering” can only be offered by state-licensed operators.
“The sports events contracts offered on [the prediction platform’s] exchange are not compliant with these protections (and many others) and are an immediate and significant threat to the public interest of Tennessee,” the cease-and-desist reads.
“Even if it did offer these protections, [the prediction platform] does not have the required license issued by the SWC and does not pay the privilege tax mandated by statute.”
Kalshi Must Refund All Funds On Deposit
In addition, the SWC demands that Kalshi void all pending sports events contracts that were entered into by Tennessee residents, and refund all funds on deposit to any person located in the state no later than Jan. 31.
The SWC threatened to impose fines of $10,000 for the first offense, $15,000 for the second offense, and $25,000 for a third or subsequent offense, injunctive relief, and a referral to law enforcement if the platforms fail to meet their demands.
The Tennessee gambling statutes state: “A person commits an offense who knowingly induces or aids another to engage in gambling, and: (1) Intends to derive or derives an economic benefit other than personal winnings from the gambling.”
This violation is classified as a Class B misdemeanor.
Other States Taking Action Against Prediction Platforms
New Jersey, New York, Illinois, Nevada, Massachusetts, Pennsylvania, and other states already entered the legal fight against prediction platforms.
The New York State Gaming Commission sent Kalshi a cease-and-desist letter saying the company offers sports betting without a state license.
Kalshi responded with an ongoing lawsuit against the state, arguing it’s a trading platform so only the Federal Commodity Futures Trading Commission has regulatory authority.
In October, Kalshi also filed an appeal against the United States District Court for the District of Maryland with the US Court of Appeals pertaining to its case against Maryland Lottery and Gaming Control Commission (MLGCC).
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