Tennessee Regulators Say No Thanks to Sports Event Contracts

• The Tennessee Sports Wagering Council sent a letter opposing sports event contracts to the Commodity Futures Trading Commission
• The council urges the commission to respect the policy decisions made in the state and not permit sports event contracts
• A roundtable on the issue will be held April 30

Tennessee sports betting regulators have officially declared their opposition to sports event contracts.

The Tennessee Sports Wagering Council (TSWC) sent a letter to the Commodity Futures Trading Commission (CFCT) opposing sports event contracts offered by CFTC regulated entities, such as Kalshi, Robinhood, and Crypto.com.

“We believe that these sports event contracts are Wagers under the Act and are being offered in violation of Tennessee law and regulations,” Mary Beth Thomas, executive director of the TSWC, wrote.

Sports Event Contracts Akin to Sports Betting?

Tennessee is the latest state to formally oppose sports event contracts within its borders, but did not take any official action against the entities offering the contracts.

Maryland, New Jersey, Nevada, Illinois, Ohio, and Montana gaming regulators have all sent cease-and-desist notices to prohibit the offering of sports event contracts within their borders. In response to the notices, KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB).

The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.

According to the TSWC, licensed online sports betting operators are the only entities in the state allowed to offer sports bets.

“The sports event contracts give consumers the option to purchase contracts corresponding to one of two outcomes of an event. In a sporting event context, a consumer is purchasing a contract that reflects which team they believe will win or lose the matchup. The ultimate result is money being won or lost based on the outcome of a game,” Thomas wrote.

Thomas continued and asked the CFTC to “respect the policy decisions made by the Tennessee Legislature and not permit the offering of sports events contracts.”

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CFTC Holding April Roundtable

The TSWC offered the letter opposing the sports event contracts ahead of the CFTC’s scheduled public roundtable on sports-related event contracts.

The roundtable will be held on April 30, with the ultimate goal of developing an official opinion on the commission’s approach to regulation and oversight of prediction markets, including sports event contracts.

It will be an important opinion, as Kalshi Co-Founder and CEO Tarek Mansour noted in a recent interview the company will only cease offering the sports event contracts if ordered by the CFTC. Mansour, and Kalshi lawyers, have long maintained the states have no regulatory power over prediction markets.