Posted on: April 16, 2025, 06:10h.
Tennessee Expresses Opinion on Sports Betting Markets
Last updated on: April 16, 2025, 06:10h.
Todd Shriber @etfgodfatherRead MoreFinancialGaming BusinessMergers and Acquisitions Tennessee throws a sports betting curveball at CFTC*
Tennessee's Sports Wagering Council (SWC) has fired a warning shot across the bow of the Commodities Futures Trading Commission (CFTC), claiming the state has exclusive authority over sports betting licensing.
In a no-nonsense letter to CFTC's Acting Director Caroline Pham, SWC's Executive Director Mary Beth Thomas laid down the law in no uncertain terms. She emphasized that sports betting in Tennessee is a matter of holding a "taxable privilege," granted under the Tennessee Sports Gaming Act.
"We believe that these sports event contracts are Wagers under the Act and are being offered in violation of Tennessee law and regulations," Thomas bluntly stated.
Thomas's missive singles out companies like Crypto.com, Kalshi, and Robinhood Markets, which, in her opinion, offer sports event contracts that amount to sports bets. Since winners and losers are determined by sporting events' outcomes, they fall under Tennessee's sports betting regulations.
Tennessee Steps Cautiously with Prediction Markets
Although Tennessee isn't joining the ranks of other states sending cease-and-desist letters to Kalshi, its stance against these companies is clear. States like Illinois, Montana, Nevada, New Jersey, and Ohio have already made moves against Kalshi. But Tennessee seems to be proceeding with caution, while simultaneously investigating the matter alongside other states such as Connecticut, Massachusetts, and Michigan, and others.
Kalshi seems ready for a legal showdown and has vowed to rely on its status as a federally regulated company. Last week, a federal judge in Nevada granted the company an injunction against the Nevada Gaming Control Board (NGCB), which means Kalshi can continue operating in the state. In his ruling, Judge Anthony Gordon indicated that Kalshi was likely to prove federal oversight, while the NGCB was unlikely to disprove it.
There are striking parallels between Nevada's complaints against Kalshi and Tennessee's displeasure. When the NGCB issued its cease-and-desist letter last month, it asserted that any operator offering sports betting in Nevada must secure a license from the Nevada Gaming Commission (NGC). In her letter to Pham, Thomas made a similar case, pointing out that sports betting in Tennessee without SWC authorization contravenes the state's Sports Gaming Act.
Tennessee Has Additional Bones to Pick
Thomas also took issue with practices that violate Tennessee's Sports Gaming Act, such as using credit cards or cryptocurrency for account funding - both prohibited by the state – and offering derivatives on injuries, penalties, or individual college athletes' actions, as well as in-game proposition bets on collegiate teams. These practices are all strictly forbidden by the SWC.
Kalshi recently announced it would accept USDC as a method of account funding but does not accept credit cards. Account funding options currently include bank deposits, debit cards, and wire transfers.
As Tennessee's legal dust settles, it finds itself at odds with other states but remains steadfast in its approach to sports betting and prediction markets. The market watch is just getting started, and it will be interesting to see how things unfold.
- The southeast state of Tennessee has challenged the Commodities Futures Trading Commission (CFTC) over sports betting regulation, claiming exclusive authority over licensing.
- In a letter to CFTC's Acting Director Caroline Pham, Tennessee Sports Wagering Council's Executive Director Mary Beth Thomas asserted that companies like Crypto.com, Kalshi, and Robinhood Markets are offering sports event contracts that fall under Tennessee's sports betting regulations.
- Tennessee's stance against companies offering sports event contracts is evident, even if it isn't issuing formal cease-and-desist letters like other states, such as Illinois, Montana, Nevada, New Jersey, and Ohio.
- Despite potentially contesting with other states, Tennessee remains firm in its approach to sports betting and prediction markets, signifying the beginning of an intriguing market watch.
