Kalshi, a regulated U.S. financial prediction market exchange, announced that it has secured a temporary restraining order (TRO) against the Tennessee Sports Wagering Advisory Council (SWAC). The injunction effectively blocks, for the time being, the council’s order that deemed Kalshi’s sports-related event contracts illegal sports wagering in the state.
The dispute arose after SWAC issued a ruling earlier this year stating that Kalshi’s offerings, which allow users to trade on the outcome of future events—including sporting events—fell under the state’s definition of sports gambling. SWAC subsequently ordered Kalshi to cease and desist offering its services to Tennessee residents, asserting regulatory jurisdiction over the products.
Kalshi immediately challenged the order in state court, arguing that its prediction contracts are highly regulated financial derivatives subject to the oversight of the Commodity Futures Trading Commission (CFTC), not unregulated sports bets. The exchange contended that SWAC exceeded its statutory authority by attempting to regulate federally sanctioned financial products.
A state judge granted Kalshi’s request for a TRO, halting the enforcement of the SWAC order until a full judicial review of the jurisdictional conflict can be conducted. This temporary measure provides Kalshi the ability to continue operating in Tennessee while the larger legal battle over the classification of prediction market contracts proceeds. The final ruling in this case is expected to set an important precedent for how prediction markets intersect with state-level sports betting regulations across the U.S.
Source: Kalshi secures temporary block on Tennessee order targeting prediction market sports contracts
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