Tennessee’s sports betting regulator has ordered prediction market platforms Calsi, Polymarket and Crypto.com to stop offering sporting event contracts to state residents.
In a cease-and-desist letter dated Friday, the Tennessee Sports Wagering Council (SWC) accused all three platforms of illegally offering sports betting products without holding licenses issued under the Tennessee Sports Wagering Act, according to a copy of the letter posted on X by sports betting attorney Daniel Wallach.
SWC said sporting event contracts listed on Calsi, Polymarket and Crypto.com’s North American Derivatives Exchange allow users to bet money on the outcome of sporting events, a practice that Tennessee law reserves only for licensed sportsbooks. Regulators argued that packaging a product as an “event contract” does not exempt it from state gaming laws.
The regulator also cited consumer protection requirements for licensed operators, such as age restrictions, responsible gaming tools and anti-money laundering measures, which it said were lacking in platform offerings.
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Tennessee orders prediction markets to issue refunds
The SWC ordered the companies to immediately stop providing sports-related contracts to Tennessee residents, void all existing contracts signed by users in the state, and provide full refunds of deposits by January 31, 2026.
Failure to comply could result in fines of up to $25,000 for each violation, according to the letter. The regulator also warned that continued non-compliance could lead to injunctive relief and referral to law enforcement for further investigation of the illegal gambling operation.
Although Calci and Polymarket operate under federal commodity law and do business with the U.S. Commodity Futures Trading Commission (CFTC), the SWC argued that federal oversight does not override Tennessee’s authority to regulate sports betting within its borders.
Cointelegraph reached out to Calsi, Polymarket, and Crypto.com for comment, but did not receive a response in time for publication.
Related: CFTC issues no-action letter to Bitnomial, paving the way for event contract
Judge temporarily blocks execution of order against Carsi in Connecticut
Last month, a U.S. federal judge temporarily barred Connecticut regulators from enforcing a cease-and-desist order against Kalsi, giving the company a brief reprieve as its legal dispute evolves. The order follows actions by the Connecticut Department of Consumer Protection against Calci, Robinhood, and Crypto.com for offering unauthorized sports betting through online event contracts.
Mr. Kalsi challenged the state’s move in court, arguing that the state’s event contracts fall under the Federal Commodities Act and are exclusively regulated by the CFTC. Judge Vernon Oliver ruled that Connecticut must suspend enforcement while the court considers Carsi’s motion for a preliminary injunction, setting a January filing deadline and scheduling oral arguments for mid-February.
The case adds to an escalating legal battle between Calci and state regulators across the country, as several states question whether prediction market contracts related to sports constitute illegal gambling. Carsi filed suit against regulators in New York, Massachusetts, New Jersey, Nevada, Maryland and Ohio.
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