Forecast market faces regulatory turmoil: US state governments halt sports contract trading

YieldWhisperer · 2026-01-11T00:42:13+00:00

Recently, Tennessee regulators have demanded several prediction platforms cease offering sports event prediction services to local users due to lack of state licensing, violating the Sports Betting Law. Although these platforms are compliant at the federal level, state law has a different definition of "sports betting," and non-compliance could result in hefty fines. This highlights the regulatory conflict between federal and state authorities.

YieldWhisperer

2026-01-11 00:42:13

Abstract generation in progress

【BlockBeats】A recent wave of compliance crackdown has erupted in the prediction market circle. On January 11, Tennessee regulators issued “cease and desist” orders to several well-known prediction platforms, demanding they immediately stop offering sports event prediction services to local users. The reason is straightforward—these platforms operated without a state license, crossing the red line of Tennessee’s Sports Gaming Law.

Ironically, these platforms have already obtained compliance status from the U.S. Commodity Futures Trading Commission (CFTC) and have been recognized as designated contract markets, allowing users to trade contracts based on sports event outcomes. But the key issue is—state law and federal law do not fully align in their definitions of “sports betting.” According to Tennessee regulations, any institution involved in sports betting, regardless of the name used, must obtain a state license. This is not optional; it is a mandatory requirement.

The regulators have set a deadline of January 31 to withdraw all platforms, close all open contracts involving Tennessee users, and refund the funds. Failure to comply? They could face fines of $25,000 per violation, and in severe cases, be referred to criminal authorities and prosecuted under the felony of promoting gambling—considered a serious crime under state law.

This incident reflects an increasingly intense conflict: although the federal-level CFTC provides a certain regulatory framework, individual states still have their own definitions and regulations regarding “gambling.” As an emerging sector, prediction markets have yet to fully understand all state boundaries.

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MerkleDreamer

· 6h ago

Here we go again, does passing the federal level mean passing the state level as well? This kind of baby-step regulation is truly remarkable --- Even after CFTC compliance, it's still not enough. Truly playing both sides --- It was about time someone took control of these platforms, engaging in betting activities under the guise of contracts --- This move by the state government is equivalent to directly cutting off the US domestic market. How many more states will follow suit? --- I really can't understand how the federal and state laws can have such different interpretations on the same issue --- This is the most authentic side of the crypto world—rules are always where you least expect them --- Deadline is January 31st, and it’s likely that some projects will have to run away

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NFTragedy

· 17h ago

This is a typical case of the left hand CFTC and the right hand state government working against each other—what a compliance joke.

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FarmHopper

· 17h ago

Here we go again, this script of "CFTC passed but state governments still can't do it"... It really just means the federal government can't control the states.

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MevShadowranger