TechFlow news, January 11 — According to Coindesk, regulators in Tennessee have ordered Kalshi, Polymarket, and Crypto.com to cease offering event contracts related to sports events to residents of the state, accusing these companies of operating without the required licenses and violating the state's gambling laws.
In a cease-and-desist letter issued on January 9, the Tennessee Sports Wagering Commission (SWC) accused the three firms of illegally providing sports betting products under the guise of event contracts.
These companies are currently registered with the U.S. Commodity Futures Trading Commission (CFTC) as Designated Contract Markets, enabling users to purchase contracts based on the outcomes of sporting events. However, under Tennessee’s Sports Wagering Act, any entity accepting wagers on sports events must hold a license issued by the state. The SWC stated that none of the three companies hold such licenses. “Therefore, the sports event wagering contracts being offered… constitute wagers as defined by the Act, and their operation violates Tennessee statutes and regulations, constituting illegal activity,” the letter stated.
The companies are required to halt all business operations in Tennessee by January 31, cancel any open contracts involving residents of the state, and refund all deposits. Failure to comply could result in civil penalties of up to $25,000 per violation and potential referral to criminal court for promotion of aggravated gambling—a felony under state law.
