Key Notes
- Tennessee ordered Kalshi to stop offering sports event contracts.
- A court order called the operations illegal gambling without a state license.
- Kalshi sued the authorities and the platform is allowed to operate till a preliminary hearing scheduled for January 26.
Tennessee regulators tried to block Kalshi from offering sports event contracts in the state. The Tennessee Sports Wagering Council sent a cease-and-desist letter ordering the platform to stop operations, void all open contracts, and refund users by Jan. 31.
However, Kalshi responded by suing the state. A federal judge temporarily halted Tennessee’s enforcement of the order while the case proceeded. The court ruled that Kalshi would suffer serious harm if forced to shut down and said the company is likely to win on its core legal claims. The injunction allows Kalshi to continue freely operating in Tennessee until a preliminary hearing set for Jan. 26.
Kalshi vs. Tennessee
The Tennessee Sports Wagering Council claimed that Kalshi was offering sports wagering without a state license. It warned of fines of up to $25,000 per violation and possible referral to law enforcement if the order was ignored.
On the other hand, Kalshi argued it falls under federal oversight as a registered derivatives exchange. The company said that the Commodity Futures Trading Commission has exclusive authority over its event contracts.
Tennessee disagreed. Regulators believe the state’s Sports Gaming Act applies and that Kalshi’s products meet the legal definition of gambling when tied to sports outcomes. The dispute leaves the platform operating in a legal gray zone.
Crackdown Spreads across Markets
Kalshi was not the only target. Tennessee sent similar cease-and-desist letters to Kalshi rival Polymarket and exchange Crypto.com, claiming all three offered illegal sports wagering without state approval.
Moreover, Congressman Ritchie Torres is also moving forward with a bill that would prevent government officials from betting on prediction markets on government actions or political outcomes.
Proud to introduce the Public Integrity in Financial Prediction Markets Act today with the support of 30+ of my colleagues.
The blurred line between predicting and profiting does not simply corrupt markets; it corrupts the government itself.https://t.co/uayPKdHxQn
— Rep. Ritchie Torres (@RepRitchie) January 9, 2026
Lawmakers possess sensitive information, and as a result, federal elected officials, political appointees, executive branch employees, and congressional staff should be barred from participating, Torres believes.
It is also important to note that Ukraine has limited access to Polymarket. The block was ordered by the national electronic communications regulator (NCEC) under Resolution No. 695.
Forbes Ukraine: Ukraine has officially limited access to Polymarket, with the national electronic communications regulator (NCEC) ordering the block under Resolution No. 695, citing the platform’s lack of a required license for activities classified as gambling. Polymarket’s…
— Wu Blockchain (@WuBlockchain) January 12, 2026
The authorities allege that the betting platform doesn’t have the necessary licenses for operating in the region.
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A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
Parth Dubey on LinkedIn
Source: https://www.coinspeaker.com/kalshi-fights-back-tennessee-court-ban/