Federal Judge Temporarily Blocks Tennessee Enforcement Action Against Kalshi
The ruling grants the prediction market operator interim relief as a broader jurisdictional dispute continues.
A US federal judge has temporarily prevented Tennessee regulators from enforcing state gambling laws against Kalshi, handing the federally regulated prediction market operator an early procedural victory in an ongoing legal dispute.
The order, issued on 12 January by District Judge Aleta Trauger, restrains the Tennessee Sports Wagering Council and other state officials from applying state gambling statutes to Kalshi while the court conducts further review. The judge found Kalshi is likely to succeed on the merits of its claims and that state enforcement could infringe rights preempted by federal law.
Judge Trauger also concluded that Kalshi would face irreparable harm without interim relief and that the balance of equities favoured maintaining the status quo. A preliminary injunction hearing has been scheduled for 26 January, with Kalshi required to post a $500 security bond for the temporary order to remain in force.
The dispute centres on whether Kalshi’s sports-related event contracts fall under state gambling regulation or are protected as federally authorised derivatives overseen by the Commodity Futures Trading Commission. Tennessee regulators argue the contracts constitute prohibited sports wagering when offered to residents, while Kalshi maintains they are financial instruments beyond state jurisdiction.
The case follows recent action by Tennessee authorities ordering Kalshi and other prediction market platforms to halt sports event offerings in the state. While the ruling does not resolve the underlying legal questions, it preserves Kalshi’s operations for now and could shape how other states approach enforcement against federally regulated prediction markets.
