Tennessee regulators issue cease-and-desist letters to Kalshi, Polymarket, and Crypto.com
Tennessee regulators issued cease-and-desist letters to Kalshi, Polymarket, and Crypto.com on Wednesday, ordering all three platforms to stop offering sports-related prediction market products in the state. The action targets their sports event contract offerings simultaneously. On the same day, securities regulators in Canada declined to oversee sports and entertainment prediction contracts on Wealthsimple's standalone app, leaving Kalshi and Polymarket unable to offer those contract types in Canada under securities regulation.
Tennessee's action piles onto Kalshi's existing state-level fights in Connecticut, New York, and Washington, forcing the platform to defend its sports contracts on yet another front. Each new case erodes the single federal license model Kalshi built; traders now hold contracts whose validity depends on state borders, not CFTC designation. Polymarket and Crypto.com face identical exposure, but Kalshi's higher profile makes it the test case attorneys general target first.
The simultaneous Canadian denial blocks all three from expanding northward with sports products under securities rules, removing a potential escape valve from U.S. state pressure. Attorneys general in states still drafting complaints can cite any loss as precedent, multiplying legal costs while the CFTC rulemaking process lags behind court timelines. Connecticut's college-betting suit against Kalshi already threatens the same product category, and a Tennessee injunction would reinforce that momentum and likely accelerate filings elsewhere.