Tennessee Issues Cease-and-Desist to Polymarket

Tennessee's Sports Wagering Council has sent cease-and-desist letters to Polymarket, Kalshi, and Crypto.com. The letters threaten potential criminal prosecution for the companies involved.

This regulatory action represents the first state-level challenge to Polymarket since its recent relaunch in the United States. The Tennessee regulatory body is targeting these platforms regarding sports wagering activities within the state.

The Tennessee Sports Wagering Council has initiated regulatory proceedings against multiple prediction market and cryptocurrency trading platforms. The council sent formal cease-and-desist letters to three specific companies: Polymarket, Kalshi, and Crypto.com.

The letters contain explicit threats of potential criminal prosecution. This indicates that Tennessee regulators believe these platforms may be operating in violation of state gambling laws. The action demonstrates the council's intent to enforce state regulations regarding sports wagering activities.

The Tennessee Sports Wagering Council serves as the regulatory body overseeing gambling activities within the state. By issuing these cease-and-desist letters, the council is formally notifying the companies of alleged violations and demanding they cease operations immediately.

Three major platforms received regulatory notices from Tennessee authorities:

• Polymarket - A prediction market platform
• Kalshi - A prediction market platform
• Crypto.com - A cryptocurrency trading platform

The inclusion of these specific companies suggests that Tennessee regulators are taking a broad approach to platforms offering wagering-like activities. The cease-and-desist letters represent a coordinated action against multiple entities operating in similar spaces.

This regulatory challenge comes at a critical time for Polymarket. The company had recently relaunched operations in the United States market. The Tennessee action marks the first state-level regulatory challenge to the platform following this relaunch.

The timing creates immediate complications for Polymarket's US operations. State-level regulatory actions can create significant obstacles for platforms attempting to establish or maintain market presence. The Tennessee cease-and-desist represents a concrete regulatory hurdle that the company must address.

The relaunch had presumably represented a renewed effort by Polymarket to serve US customers. This state-level action from Tennessee could potentially impact the company's broader US market strategy.

The cease-and-desist letters carry significant legal weight. The threat of criminal prosecution indicates that Tennessee regulators view the alleged violations as potentially serious offenses rather than minor regulatory infractions.

Companies receiving such letters typically face several potential outcomes:

1. Immediate cessation of operations in Tennessee
2. Legal challenges to the regulatory findings
3. Negotiations with regulatory authorities
4. Potential criminal charges if non-compliance continues

The Tennessee Sports Wagering Council has established a formal regulatory process. The cease-and-desist letters represent the initial step in potential enforcement proceedings. The companies now face decisions regarding their response strategy and operational status in Tennessee.

This action may also signal broader regulatory scrutiny of prediction market platforms across other states. Tennessee's aggressive stance could potentially influence regulatory approaches in other jurisdictions.