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Checked Oct. 21, 2026
TN ยท Checked Oct. 21, 2026
In litigation
The Sixth Circuit vacated Kalshi's Tennessee injunction (rehearing is pending); Tennessee has since ordered Underdog to stop offering sports contracts, and Underdog has sued.
In January 2026 the Tennessee Sports Wagering Council ordered Kalshi, Polymarket and Crypto.com to stop offering sports event contracts and refund Tennessee customers. Kalshi obtained a temporary restraining order and then a preliminary injunction from Judge Aleta Trauger. On September 25, 2026, the Sixth Circuit vacated that injunction, holding that the contracts are not swaps and that state gambling law is not preempted; Kalshi has sought rehearing en banc. In October the Council sent Underdog a cease-and-desist letter, and Underdog sued in federal court. Tennessee also enacted a 2026 law making prediction-market manipulation a felony.
No decision date set13 days since the petition
Petition filed Oct. 9Pending
Resolves Yes if the court grants panel rehearing or rehearing en banc in KalshiEX v. Schuler and KalshiEX v. Orgel, No if it denies both.
Sixth Circuit Nos. 26-3196 and 26-5235. Source: Kalshi's petition (PDF)
Operator lawsuit, Underdog
Underdog Exchange DCM and UDM (Underdog Predict) sued Attorney General Skrmetti and Sports Wagering Council officials and members in the Middle District of Tennessee (Nashville), seeking a declaration of federal preemption and a permanent injunction.
Source: Underdog complaint (M.D. Tenn. No. 3:26-cv-01461, ECF 1)
Cease-and-desist, Underdog
The Council's director of fantasy sports told Underdog to halt its prediction market operations in Tennessee, warning of penalties, referral to law enforcement and possible revocation of its affiliate's fantasy sports license.
Source: Covers
Other development, Kalshi
Kalshi petitioned for panel rehearing and rehearing en banc of the Sixth Circuit decision in the consolidated Ohio and Tennessee appeals.
Court order, Kalshi
The Sixth Circuit vacated the preliminary injunction and remanded, holding that sports event contracts are not swaps and that the Commodity Exchange Act does not preempt Tennessee's gambling laws.
Source: U.S. Court of Appeals for the Sixth Circuit opinion 26a0272p.06
Legislation
Gov. Bill Lee signed SB 1992/HB 2079, which makes it a Class E felony to try, for financial gain, to influence an event while holding a prediction-market contract tied to it (Public Chapter 1109, effective July 1, 2026).
Court order, Kalshi
Judge Trauger granted Kalshi a preliminary injunction against state enforcement, finding the contracts likely swaps and state law likely preempted; the Council itself was dismissed from the case.
Source: SBC Americas
Court order, Kalshi
Judge Aleta Trauger granted Kalshi a temporary restraining order, allowing it to keep offering sports contracts in Tennessee.
Source: SBC Americas
Cease-and-desist, Kalshi, Polymarket, Crypto.com
The Sports Wagering Council ordered the three platforms to stop offering sports event contracts to Tennesseans, void pending contracts and refund customer deposits by January 31, 2026. The letters cited tiered fines of $10,000 to $25,000 per violation and possible criminal referral.
Source: The Block
Operator lawsuit, Kalshi
Kalshi sued the Council, its executive director Mary Beth Thomas and Attorney General Jonathan Skrmetti in the Middle District of Tennessee.
Source: SBC Americas
Will a Sixth Circuit panel side with Kalshi against Ohio and Tennessee?
The panel affirmed the denial of Kalshi's injunction in Ohio and vacated Kalshi's injunction in Tennessee and remanded. Kalshi has asked for rehearing. Sixth Circuit Nos. 26-3196 and 26-5235. Source: Opinion
SB 1992 / HB 2079 (Public Chapter 1109)EnactedMay 22, 2026
Criminal offenses: prediction market manipulation
Makes it a Class E felony to try, for financial gain, to influence an event while holding a prediction-market contract tied to it. Signed May 22, 2026; Public Chapter 1109 assigned May 27; effective July 1, 2026.
Source: fastdemocracy.com