Tennessee Takes Aim at Crypto Sports Betting

Kalshi, Polymarket, and Crypto.com Face Legal Action

Tennessee is taking a firm stance against three platforms offering sports betting through cryptocurrency. The Tennessee Sports Wagering Council (SWC) has ordered Kalshi, Polymarket, and Crypto.com to cease their sports event contracts in the state, citing violations of state law.

Why the Crackdown?

The SWC alleges that these platforms allow users to bet on sports outcomes, a privilege reserved for licensed sportsbooks in Tennessee. Additionally, the platforms lack the consumer protections mandated for licensed operators, such as age verification and tools to combat problem gambling.

Deadline and Penalties

The platforms have been given until the end of January 2026 to stop offering these contracts to Tennessee residents and refund all associated funds. Failure to comply could result in fines of up to $25,000 per violation. The SWC has also warned of potential legal action or referrals to law enforcement.

Federal vs. State Jurisdiction

Despite Kalshi and Polymarket being registered with a federal agency, the SWC maintains that Tennessee's sports betting laws must be adhered to. The state does not recognize federal registration as sufficient compliance.

Legal Battles Continue

This is not the first time Kalshi has faced legal challenges. Last month, a federal judge temporarily blocked Connecticut from enforcing a similar order against them. Kalshi argued that its contracts are regulated by federal law, not state law, and the judge agreed to pause enforcement while reviewing the case.

Kalshi remains defiant, suing regulators in multiple states and asserting that its contracts are legal under federal law. The legal battle is far from over.