Tennessee Issues Cease-and-Desist Notices to Kalshi, Polymarket, and Crypto

• The Tennessee Sports Wagering Council has issued three cease-and-desist notices to several prediction market companies
• Kalshi, Polymarket, and Crypto.com all received notices
• The council is ordering the companies to immediately cease offering sports event contracts and issue refunds by Jan. 31

---

The Tennessee Sports Wagering Council has had enough of sports event contracts in the Volunteer State.

The regulatory body issued cease-and-desist notices to Kalshi, Polymarket, and Crypto.com, ordering the companies to immediately cease offering sports event contracts in the state and issue full refunds to customers.

“These sports event contracts give consumers the option to purchase contracts corresponding to one of two outcomes of an event. For example, a consumer may purchase a contract that reflects which team they believe will win or lose the matchup. The ultimate result is money being won or lost based on the outcome of a game. Accordingly, the sports events contracts offered on (the company’s) exchange are wagers under the act and are being offered illegally in violation of Tennessee law and regulations,” Mary Beth Thomas, Executive Director of the Tennessee Sports Wagering Council, wrote in all three of the cease-and-desist notices.

Sports Event Contracts Equate Illegal Tennessee Betting

The notices order the companies to immediately cease offering sports event contracts in the state and to fully refunds customers their account deposits and funds by no later than Jan. 31, 2026.

All three companies are running afoul of the Tennessee Sports Wagering Act, according to the sports wagering council. Any person or entity who accepts money risked on the outcome of a sporting event without a license issued by the sports wagering council is violating the act.

The Tennessee legislature, the council reported, requires a number of safeguards for licensed entities to offer sports betting in the state, including a minimum age of 21 to participate, specific anti-money laundering controls, and a requirement to offer various forms of responsible gaming tools and protections for customers. Neither Kalshi, Polymarket, or Crypto.com offer these specific requirements to its customers.

Additionally, none of the companies pay the sports betting tax to the state.

Failure to comply with the demands in the cease-and-desist notices will result in a $10,000 fine for a first offense, $15,000 for a second offense, and $25,000 for a third and subsequent offense.

“Thus, (the company’s) failure to comply with the SWC’s demand will also result in the referral of Kalshi’s illegal gambling operation to law enforcement for further investigation,” Thomas wrote in each notice.

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. pic.twitter.com/jDIPIwsrCn

— Daniel Wallach (@WALLACHLEGAL) January 9, 2026

Tennessee Latest State to Act Against Sports Event Contracts

Tennessee is the latest state to act against sports event contracts. Connecticut issued its own cease-and-desist notices to Kalshi, Robinhood, and Crypto.com in early December.

According to the notices issued by the Connecticut Department of Consumer Protection Gaming Division (DCP), the prediction market operators allow users to “purchase contracts based on their belief that a particular sport outcome will occur, such as a specific team winning a game, division, or championship.”

All three operators are currently offering illegal sports wagers in the state, according to the DCP, running afoul of state law and engaging in sports wagering without a license.

“These contracts constitute sports wagering because they allow Connecticut residents to risk something of value for gain by an electronic wagering platform through the placement of wagers on the outcome of live sporting events or portions of a live sporting event including future events,” Director of Gaming Kristofer Gilman wrote in the letters.

Will the companies pull their sports event contracts out of Tennessee? It’s highly unlikely, as the prediction market operators, especially Kalshi, have taken most fights to either state or federal court when faced with cease-and-desist notices.

Lawsuits were immediately filed by Kalshi against the Connecticut DCP just one day after the notices were issued to the company. Kalshi followed a similar path in New York after being issued a cease-and-desist, filing a lawsuit against the New York State Gaming Commission in late October.