Kalshi Remains in Tennessee For Now As Judge Approves Temporary Restraining Order

• A Tennessee federal judge has approved a temporary restraining order, which will allow Kalshi to continue operating in the state
• The Tennessee Sports Wagering Council sent Kalshi a cease-and-desist order for its sports event contracts
• Kalshi will be able to offer its sports event contracts in Tennessee until a hearing is held for the company’s preliminary injunction request

Kalshi has notched an early legal victory in Tennessee, as Middle District of Tennessee Judge Aleta A. Trauger issued a temporary restraining order against the Tennessee Sports Wagering Council.

The temporary restraining order will prohibit the Tennessee Sports Wagering Council’s ability to enforce a recent cease-and-desist order it levied against Kalshi and its sports event contract offerings in the Volunteer State.

The decision came just days after Kalshi filed a lawsuit against the state regulatory council.

Quick Turnaround on Temporary Restraining Order

Judge Trauger approved the temporary restraining order late Monday night, just three days after Kalshi filed its lawsuit against the Tennessee Sports Wagering Council. The council will not be able to enforce its cease-and-desist notice against the company until a hearing for a preliminary injunction request is held on Monday, Jan. 26, at 9:30 a.m.

The Tennessee Sports Wagering Council last week 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.

Kalshi is following a similar route in Tennessee as it has in other states where gaming commissions have ordered the company to pull their sports event contracts out of its borders. Kalshi filed the lawsuit within 24-hours of receiving the cease-and-desist notice from the gaming council.

Judge Trauger approved the temporary restraining order for the following reasons:

• Plaintiff is likely to succeed on the merits of its claims and its rights will likely be violated by Defendants through the enforcement of preempted state laws unless defendants are restrained from enforcing state law
• Plaintiff will suffer irreparable injury and loss if defendants are permitted to enforce state law
• Plaintiff has no adequate remedy at law
• The balance of equities favors granting plaintiff’s motion

The cease-and-desist notices ordered the companies to cease their offerings immediately and refund customer funds by Jan. 31, 2026, at the latest.

Why the Lawsuit?

Kalshi’s lawsuit against the Tennessee Sports Wagering Council – and all of its lawsuits against state gaming commissions – revolves around the central question of who regulates sports event contracts, and prediction markets, in general.

Companies such as Robinhood, Kalshi, and Crypto.com believe that state regulatory bodies do not have the right to intrude on the government’s “exclusive” authority to regulate prediction market, filing lawsuits in New Jersey, Nevada, and Maryland to defend its practices. These companies believe the CFTC is the only regulatory body that can legally block contracts from being offered to customers.

State gaming regulators maintain the markets need to be beholden to regulations, taxes, and license fees that sports betting and gaming operators are required to follow.

The prediction market companies believe their offerings are not required to comply with state laws, as they have been preempted by the Commodity Exchange Act.