Tennessee court halts regulatory agency action, Kalshi prediction market platform wins temporary victory

[Chain Wen] The crypto prediction market faces a legal turning point again. The story in Tennessee begins last Friday — the state’s Sports Betting Commission issued an order banning Kalshi, Polymarket, and Crypto.com for offering sports event contracts without a license. The regulators demanded these platforms immediately cease services, clear all contracts, and refund users in full by January 31. Each violation could result in a fine of up to $25,000, which is quite substantial.

Kalshi did not sit idly by; it directly sued the Tennessee Sports Betting Commission and the Attorney General. On Monday, federal judge Aleta Trauger issued an order supporting Kalshi’s request for a preliminary injunction. In simple terms, until the court makes a final ruling, the regulators must step back and cannot take action against Kalshi.

The judge’s reasoning was straightforward — without restraining the regulators, Kalshi would suffer “irreparable harm.” More importantly, the judge believed that Kalshi is very likely to win in the final lawsuit, and its legal rights could be infringed upon. This indicates that the battle between regulators and platforms is far from over, and subsequent developments are worth watching.