Tennessee joins growing list of states to hit out at prediction markets
Sports Wagering Council asks Commodity Futures Trading Commission to respect state law and prevent the proliferation of sports event contracts across the US
The Tennessee Sports Wagering Council has urged the Commodity Futures Trading Commission (CFTC) to respect state regulations and not allow sports event contracts to be offered.
In a letter signed by executive director Mary Beth Thomas and addressed to the CFTC’s acting chair Caroline Pham, the Tennessee regulator joined a growing group of states pushing back against the vertical.
The letter stated that the Tennessee Sports Wagering Council considers sports event contracts offered by the likes of Kalshi, Robinhood, and Crypto.com to be sports wagers under the Tennessee Sports Gaming Act.
The regulator said they constituted a “violation of Tennessee law and regulations.”
Further listing its concerns with sports event contracts — which essentially have launched a form of sports betting across all 50 US states for anyone aged 18 or over — the council said consumer protections from prediction markets are not up to scratch.
In Tenneessee, sports betting is only allowed for those aged 21 and over, credit cards and crypto payments are banned, betting on college sports is prohibited, and there are several responsible gambling requirements laid out for licensees.
The Tennessee Sports Wagering Council argued that the prediction markets operating across the US do not adhere to these requirements and are not “compliant with these protections mandated by the Tennessee legislature.”
The letter concluded: “As the Commission reviews these sports events contracts, we ask that you respect the policy decisions made by the Tennessee legislature and not permit the offering of sports events contracts.
“We appreciate the opportunity to comment and are happy to answer any questions.”
The objection from the Tennessee Sports Wagering Council takes the current number of states to publicly hit out at prediction markets to eight.
Michigan, Montana, Nevada, New Jersey, Illinois, Ohio, and Maryland have all issued cease-and-desist letters in recent weeks.
However, Kalshi, which has emerged as the vertical’s market leader, is remaining steadfast in its approach.
CEO Tarek Mansour took to LinkedIn this week to reveal $86m was traded on the platform for the Masters, as Rory McIlroy completed his golf Grand Slam.
Mansour wrote: “A large share of users told us they only watched the Masters because they had a position on it. Skin in the game changed the viewing experience — and in many cases, created new fans of the sport.
“This two-way dynamic — where the event drives market activity and the market drives deeper engagement with the event — is just getting started. We are seeing the birth of a new feedback loop between watching and trading. Prediction markets are the future of news, including sports news.”
Kalshi has also secured a reprieve from the courts in New Jersey and Nevada to continue offering prediction markets for sports.
The CFTC is set to host a roundtable at the end of the month, with the legality and positioning of sports event contracts in the US on the agenda.