Tennessee Joins Effort to Resist Predictive Betting Practices
Title: Sports Prediction Markets face Legal Controversy: Where does Tennessee Stand?
By: Michael Savio// Apr 17, 2025 // Sports Gambling Photo by Nick Shields, CC BY 2.0
Prediction markets for sports have become increasingly popular, with platforms like Kalshi, Robinhood, and Crypto.com offering futures contracts tied to sports outcomes. Despite these companies asserting their operations to be federally legal under the Commodity Futures Trading Commission (CFTC) oversight, there's ongoing debate over their legality.
Key Takeaways:
- Several states have issued cease-and-desist letters to prediction market operators, while others are investigating similar actions.
- The CFTC has faced pressure from state regulators, tribal interests, sports leagues, and advocacy groups to clarify or restrict the legality of sports prediction markets.
- Sports leagues like the NBA and MLB have raised concerns about the markets' potential impact on integrity.
Background insights:
The regulation of sports prediction markets is a complex issue, with state regulators and sports leagues contesting their legality. Some legal experts argue that under the Federal Wire Act, these markets should be barred from interstate operation. However, federal courts have disagreed in some cases, leaving the legal status ambiguous.
Contested Ground
At least six states have issued cease-and-desist letters to prediction market operators, demanding they halt their services within their jurisdictions. Court cases are ongoing, with Kalshi winning preliminary injunctions against cease-and-desists in Nevada and New Jersey. The CFTC is at the center of the debate, but ongoing pressure from multiple stakeholders has resulted in the cancellation of a planned roundtable to discuss the issue's regulation.
State Regulators
Some states are actively challenging the legality of sports prediction markets. Illinois, Maryland, Montana, Nevada, New Jersey, and Ohio have issued cease-and-desist letters. Other states are investigating similar actions, though no specific details about Tennessee's stance are available.
Sports Leagues and the CFTC
The NBA and MLB have submitted concerns to the CFTC, citing integrity risks. Notably, a planned CFTC roundtable to discuss the issue was canceled in April 2025, with no clear reschedule date.
Federal Law Considerations
Some legal experts argue that under the Federal Wire Act, sports prediction markets should be barred from interstate operation. However, federal courts have so far disagreed in some cases, leaving the legal status ambiguous.
Bottom Line:
The legality of sports prediction markets continues to be a hotly debated topic. As of now, there's no clear regulatory guidance from the CFTC, and court cases are ongoing. No specific update about Tennessee's request to the CFTC is available in the provided sources. Stay tuned for further developments in this fascinating slice of the online gambling industry!
- Online sports prediction markets, such as those offered by Kalshi, Robinhood, and Crypto.com, are a subject of controversy in the gambling industry, especially in light of Tennessee's potential stance on the issue.
- Las Vegas, known for its casino-and-gambling scene, is one of the states that has actively challenged the legality of sports prediction markets, along with Illinois, Maryland, Montana, Nevada, New Jersey, and Ohio.
- Despite their popularity, sports prediction markets face regulatory challenges, with sports leagues like the NBA and MLB raising concerns about their impact on sports integrity, and the ongoing legal battle between prediction market operators and state regulators adding to the controversy.
