Tennessee Orders Kalshi, Polymarket, and Crypto.com to Halt Sports Prediction Contracts

 

Tennessee regulators have ordered Kalshi, Polymarket, and Crypto.com to immediately stop offering sports-related prediction contracts to residents of the state, escalating a growing conflict between state gambling authorities and federally regulated prediction markets.

The Tennessee Sports Wagering Council issued cease-and-desist orders on January 9, demanding that the three platforms halt all sports event contracts, void any open positions tied to Tennessee users, and refund customer funds by the end of the month.

State officials argue the products function as unlicensed sports betting under Tennessee law, regardless of how the companies describe them.

The move places Tennessee alongside a growing list of states pushing back against prediction markets that allow users to trade contracts based on the outcomes of sporting events, elections, or real-world events. While the platforms frame these products as financial instruments, state regulators increasingly see them as gambling by another name.

 

What Tennessee Is Demanding

According to the orders, Kalshi, Polymarket, and Crypto.com must immediately cease offering sports contracts to Tennessee residents. Any existing sports-related contracts must be canceled, and all funds deposited by users in the state must be returned by January 31.

Failure to comply could expose the companies to civil penalties, injunctions, and possible criminal enforcement under Tennessee’s sports gaming laws.

The council’s position is straightforward. If money is being risked on the outcome of a sporting event, the state considers it sports wagering, which requires a license, tax payments, and adherence to consumer protection rules.

 

The Regulatory Fault Line

At the heart of the dispute is a long-running jurisdictional battle between state gambling regulators and the federal framework governing derivatives and commodities trading.

Kalshi and Polymarket operate under federal oversight tied to commodities regulation, and Crypto.com has positioned its event contracts as a similar financial product. The companies argue that their platforms fall outside traditional sports betting laws and should be regulated at the federal level.

Tennessee, like several other states, rejects that argument. State officials maintain that federal oversight does not override state authority when it comes to gambling conducted within state borders.

This disagreement has become one of the most contentious regulatory issues facing crypto-adjacent markets in the U.S.

 

A Pattern Across the States

Tennessee’s action is not an isolated case. Over the past year, multiple states have issued warnings or cease-and-desist orders targeting prediction markets tied to sports outcomes. Recently, Coinbase filed suit against Connecticut, Michigan, and Illinois. Those states argue that Coinbase's prediction markets amount to illegal gambling and are attempting to ban them there.

Gaming regulators in states such as Nevada, New Jersey, Maryland, Ohio, and Illinois have raised similar concerns, arguing that prediction markets undermine state-regulated sports betting ecosystems while avoiding licensing requirements and taxes.

In some cases, platforms have pulled back voluntarily. In others, companies have opted to fight.

Kalshi has already challenged similar enforcement actions in court, arguing that state gambling laws are being improperly applied to federally regulated markets. The outcome of those cases could shape the future of prediction markets nationwide.

 

Why States Are Pushing Back Now

State regulators say the issue is not just about definitions, but about consumer protection and regulatory consistency.

Licensed sportsbooks are required to meet strict standards related to age verification, responsible gambling tools, fund segregation, and auditing. States argue that prediction markets offering sports contracts operate outside those guardrails while competing for the same customers.

There is also growing concern that prediction markets blur the line between financial trading and gambling in ways existing laws were never designed to address.

For regulators, allowing these products to operate unchecked could weaken the authority of state gaming frameworks that were carefully built following the legalization of sports betting.

 

What Happens Next

The Tennessee order adds new pressure on Kalshi, Polymarket, and Crypto.com at a time when prediction markets are expanding rapidly and attracting increased attention from both traders and policymakers.

The companies could comply and exit the state, challenge the order in court, or push for clearer federal guidance that limits states’ ability to intervene.

Until that happens, the industry remains stuck in a regulatory gray zone, where legality depends less on federal approval and more on how individual states choose to interpret decades-old gambling laws.

 

For crypto-linked prediction markets, Tennessee’s action is another reminder that regulatory risk in the U.S. remains fragmented, unpredictable, and increasingly aggressive.

Kalshi Integrates TRON to Expand On-Chain Liquidity for Prediction Market

Kalshi is gaining deeper onchain liquidity with new TRON integration.

 

The U.S. regulated prediction market operator has integrated the TRON network, expanding on-chain access to liquidity for what it calls the world’s largest prediction market. The move gives traders new ways to move funds in and out of Kalshi using blockchain rails, while signaling that the company is getting more serious about meeting crypto native users where they already are.

At a basic level, the integration allows users to deposit and withdraw assets like USDT on TRON directly into Kalshi. That may sound incremental, but for a platform built inside the U.S. regulatory perimeter, it is a meaningful shift. Blockchain rails offer faster settlement, lower friction, and access to global liquidity that traditional payment systems still struggle to match.

Kalshi’s bet is that prediction markets work better when capital can move freely.

 

A Hybrid Market Takes Shape

Kalshi occupies a strange but increasingly important corner of finance. It operates under the oversight of the Commodity Futures Trading Commission, which gives it the ability to offer event based contracts tied to real world outcomes like inflation prints, election results, and economic data releases.

What makes Kalshi different is that it is now trying to blend that regulated structure with crypto infrastructure.

By integrating TRON, and previously Solana, Kalshi is building what amounts to a hybrid market. The core exchange remains regulated and off-chain, but the access points are increasingly on-chain. Users can tap blockchain liquidity while still trading contracts that settle under U.S. rules.

For Kalshi, liquidity is the whole game. Prediction markets only work when there are enough participants on both sides of a trade. Crypto users already understand how to move stablecoins, bridge assets, and arbitrage prices across venues. Bringing those users into Kalshi’s ecosystem could deepen markets that have historically been thinner than traditional financial products.

 

Why TRON

TRON’s appeal here is straightforward. It is one of the most widely used blockchain networks in the world for real payment activity, particularly stablecoin transfers. A significant portion of global USDT volume already flows through TRON every day, making it a natural fit for a platform focused on liquidity and accessibility.

For Kalshi, that usage matters more than brand perception. TRON offers fast settlement, low transaction costs, and a network that is already embedded in how traders move dollars on-chain. Those characteristics make it easier for both institutional and international users to move capital efficiently without friction eating into trading activity.

TRON’s reach outside the United States is also a feature, not a bug. Prediction markets benefit from diverse participation and constant flow, and TRON’s global footprint helps bring in users who already operate on-chain as part of their daily financial activity.

The integration also reflects a pragmatic approach. Rather than betting on hype cycles, Kalshi is aligning with infrastructure that is already proven at scale. Alongside its work on Solana, TRON adds another high throughput rail that supports Kalshi’s broader goal of making prediction markets more liquid, accessible, and always on.

 

Regulation Meets Crypto Reality

Kalshi’s regulatory status remains central to its pitch. Unlike fully decentralized prediction markets, Kalshi operates under explicit U.S. approval. That has allowed it to offer contracts that other platforms either cannot or will not touch.

At the same time, regulation comes with constraints. Kalshi cannot simply open the floodgates to every DeFi user worldwide. Integrating blockchains like TRON is a way to expand access without abandoning compliance.

It is a careful balancing act. Too much decentralization risks regulatory pushback. Too little innovation risks irrelevance in a market where crypto native platforms move faster.

So far, Kalshi seems intent on threading that needle.

 

A Growing Role in Media and Markets

Prediction markets have also become more visible in mainstream discourse, and Kalshi has leaned into that. Its data is increasingly referenced as a real time signal of market expectations, particularly around politics and macroeconomic events.

That visibility matters. Prediction markets tend to gain relevance when people start trusting them as indicators rather than curiosities. More liquidity, especially from crypto users accustomed to trading around the clock, could reinforce that feedback loop.

The more capital flows through these markets, the more informative prices become.

 

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Kalshi and Polymarket Post Record Volume as Prediction Markets Hit Nearly $10 Billion in November

Prediction markets are entering their strongest era to date. In November 2025, Kalshi and Polymarket collectively recorded nearly 10 billion dollars in trading volume, marking the most active month in the history of the sector. This surge shows that prediction markets are no longer niche experiments. They are becoming influential financial instruments used by millions of traders, analysts and institutions.

The industry’s rapid expansion reflects growing interest in real world event trading, increased liquidity and a shift in how investors view information markets.

 

How Kalshi and Polymarket Reached New Heights

Institutional Investment and Regulatory Clarity

Kalshi has positioned itself as the regulated prediction exchange in the United States. With a green light from federal derivatives regulators, the platform attracted significant institutional investment. Its most recent funding round valued the company at approximately 11 billion dollars.

Polymarket, on the other hand, grew from the crypto native community. Its decentralized architecture and global accessibility attracted users drawn to event based markets that operate without borders. As Polymarket expanded, its volume accelerated sharply, particularly in 2024 and 2025.

Together, the two platforms now represent the core of the prediction market ecosystem. One operates with traditional oversight, and the other leverages blockchain transparency. Both models have succeeded by meeting rising demand for trading around news, sports, politics and global uncertainty.

Surge in Demand From Sports, Politics and Macroeconomics

The November boom appears to have been driven by significant events across sports and entertainment, along with heightened activity in political and macroeconomic markets. Major sporting events, international political developments and volatility in global markets created a perfect environment for event driven speculation.

Polymarket in particular saw sharp month over month growth, with more than 3 billion dollars traded in October followed by an even stronger November contribution. Kalshi also reported record numbers across political, sports and economic categories.

 

What This Means for the Future of Prediction Markets

Prediction Markets Are Becoming a Serious Asset Class

A combined 10 billion dollars in monthly trading volume places prediction markets in the realm of legitimate financial instruments. This surge demonstrates that traders are increasingly comfortable speculating on real world outcomes using structured markets rather than informal sentiment or traditional betting platforms.

Liquidity and Market Depth Are Strengthening

As more capital enters the ecosystem, liquidity improves and spreads tighten. Higher liquidity reduces volatility and improves price accuracy, allowing events to reflect true market expectations. This makes prediction markets more reliable indicators of sentiment around elections, economic reports, policy shifts and high profile entertainment events.

Traditional Finance Meets Crypto Native Innovation

Kalshi and Polymarket represent two very different models. Kalshi is regulated, compliant and geared toward traditional market participants. Polymarket is decentralized, global and capable of listing a wide variety of markets. The success of both platforms shows that prediction markets can appeal to different audiences and regulatory frameworks while still growing in parallel.

New Hedging and Speculation Tools

Prediction markets enable traders to hedge against real world uncertainty. Instead of relying solely on equities, commodities or forex markets, users can now hedge or speculate directly on election outcomes, interest rate decisions, policy changes or cultural events. This is a fundamental expansion of what financial markets can price.

 

Challenges That Still Remain

Prediction markets face headwinds even as they achieve record volume.

• Regulatory uncertainty. Some jurisdictions classify certain event markets as gambling, while others treat them as derivatives.

• Concentration of liquidity. Large events dominate attention, leaving smaller markets with limited participation.

• Volatility around major events. Binary markets can swing sharply as news breaks, creating risk for traders and market makers.

• Infrastructure demands. Platforms must scale securely to handle institutional interest and larger volumes.

How Kalshi, Polymarket and future competitors handle these challenges will help determine whether prediction markets can sustain long term growth.

 

Final Thoughts

The combined 10 billion dollar surge in November volume from Kalshi and Polymarket signals a major shift in the financial landscape. Prediction markets are becoming mainstream. They are attracting serious capital, gaining institutional legitimacy and proving that people want tools that let them trade on real world information.

Whether it is politics, macroeconomics, sports or cultural events, prediction markets offer a new expression of financial participation. If growth continues, they may soon become a standard part of global finance, sitting alongside equities, futures, options and digital assets.

 

This moment marks the transition from niche concept to powerful market infrastructure. The prediction market revolution is now fully underway.

 

Stay Connected

You can stay up to date on all News, Events, and Marketing of Rare Network, including Rare Evo: America’s Premier Blockchain Conference, happening  July 28th-31st, 2026 at The ARIA Resort & Casino, by following our socials on X, LinkedIn, and YouTube.