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>>Tennessee authorities issue cease‑and‑desist notices to Polymarket, Kalshi, and Crypto.com — full report

Tennessee authorities issue cease‑and‑desist notices to Polymarket, Kalshi, and Crypto.com — full report

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about 16 hours ago

Regulatory Action in Tennessee

The Tennessee Sports Wagering Council issued cease‑and‑desist letters to Polymarket, Kalshi, and Crypto.com, ordering them to stop offering sports event contracts to state residents. The firms must void pending contracts and refund all deposits by January 31 2026. Non‑compliance triggers fines of $10,000 for a first offense, $15,000 for a second, and $25,000 for subsequent violations, plus possible injunctive relief.

Conflict with Federal Designation

All three platforms are registered with the CFTC as designated contract markets, which permits nationwide event‑based derivatives. Despite this federal approval, states have begun enforcing their own licensing rules, as seen in Connecticut’s December 2025 cease‑and‑desist orders to the same companies. Polymarket’s Tennessee issue marks its first state‑level enforcement action in the U.S.

Broader Industry Scrutiny

Prediction markets surged after the 2024 U.S. elections, attracting both retail users and institutional investors. High‑profile gains, such as a trader earning over $400,000 on a Venezuela conflict prediction, have spurred calls to curb insider trading. Representative Ritchie Torres is drafting legislation to bar government‑affiliated individuals from participating in state‑related prediction markets.