Tennessee orders Polymarket, Kalshi, and Crypto.com to halt sports activities prediction markets, signaling tighter U.S. regulatory scrutiny.
Polymarket and Kalshi, two crypto prediction platforms, have been hit with stop and desist orders from the Tennessee Sports activities Wagering Council.
This motion is a part of a rising regulatory crackdown on prediction markets, with the platforms now being requested to cease providing sports activities betting contracts to Tennessee residents.
Accordingly, the Tennessee regulator has set a January 31 deadline for compliance; in any other case, it has warned of additional authorized motion.
Tennessee’s Stop-and-Desist Orders Towards Crypto Platforms
The Tennessee Sports activities Wagering Council issued cease-and-desist letters to Polymarket, Kalshi, and Crypto.com, demanding the companies cease providing sports activities betting contracts.
These platforms should void all present contracts and situation refunds to customers by January 31.
The council has made it clear that failure to conform will lead to a referral to regulation enforcement for additional investigation.
BREAKING: Tennessee Sports activities Wagering Council sends cease-and-desist letters to Kalshi (📸), Polymarket and Crypto, demanding that they stop providing sports activities occasion contracts to TN prospects instantly, void all pending contracts and situation refunds by Jan. 31. Lawsuits are imminent. pic.twitter.com/jDIPIwsrCn
— Daniel Wallach (@WALLACHLEGAL) January 9, 2026
This motion highlights the continued rigidity between prediction markets and conventional sports activities betting laws.
The rise of crypto-based platforms like Polymarket and Kalshi has raised questions on whether or not they need to be categorised as betting entities.
These platforms supply customers the flexibility to wager on numerous occasions, from sports activities outcomes to political occasions, blurring the traces between conventional playing and market prediction.
Regulatory Scrutiny of Prediction Markets Grows
The motion in Tennessee isn’t an remoted case. Kalshi and Crypto.com obtained related cease-and-desist orders from Connecticut’s Division of Shopper Safety (DCP) in December 2025.
Kalshi has since filed a movement for a preliminary injunction, in search of to reverse Connecticut’s order.
Nonetheless, the state has opposed this movement, arguing that Kalshi can not show hurt from ceasing its “illegal conduct.”
The elevated regulatory scrutiny follows issues in regards to the legitimacy and transparency of prediction markets.
A serious situation arose when a Polymarket dealer made $400,000 by betting on the ousting of Venezuela’s former President Nicolás Maduro simply earlier than his arrest.
This prompted allegations of insider buying and selling because of the timing of the wager, drawing the eye of lawmakers.
Associated Studying: Polymarket Bets Spark Insider Buying and selling Fears Earlier than Maduro Seize
Issues About Market Integrity and Insider Buying and selling
The controversy surrounding Polymarket’s Maduro wager has led to heightened scrutiny of crypto prediction platforms.
Congressman Ritchie Torres launched the ‘Public Integrity in Monetary Prediction Markets Act’ to forestall political insiders from taking part in such markets.
The act goals to limit political figures from betting on occasions the place they might have insider information, aiming to guard the integrity of monetary prediction markets.
Moreover, Congresswoman Dina Titus has raised issues about Polymarket’s capacity to adjust to the Commodity Futures Buying and selling Fee’s (CFTC) laws.
She has referred to as for the platform to offer solutions relating to its safeguards in opposition to insider buying and selling.
The scrutiny on these platforms is rising, and regulators are pushing for clearer guidelines to make sure market equity and transparency.
In mild of latest betting exercise surrounding the seize of President Nicolás Maduro, I’ve critical issues about @Polymarket’s capacity, and willingness, to adjust to @CFTC laws.
I’m demanding solutions from Polymarket CEO @shayne_coplan relating to the safeguards… pic.twitter.com/fHpjLpsykG
— Dina Titus (@repdinatitus) January 9, 2026
The actions in Tennessee and Connecticut underscore the growing regulatory strain on crypto platforms providing prediction markets.
As lawmakers and regulators proceed to look at these platforms, the way forward for prediction markets may even see vital modifications.