Kalshi has been granted a temporary restraining order after it filed a lawsuit against the Tennessee Sports Wagering Council, arguing it tried to engage “in good faith” but was only met with a cease and desist.
In a lawsuit filed against the Tennessee Sports Wagering Council on Friday (January 9), Kalshi has claimed that it attempted to open a dialogue with the Council but representatives refused to meet with the prediction market operator. This was then followed with a cease-and-desist letter to Kalshi, as well as two other prediction markets, that demanded Kalshi stop all operations in Tennessee.
The judge on the lawsuit granted a temporary restraining order for Kalshi against the council pending a hearing on January 12, as confirmed by a statement seen by ReadWrite, reasoning: “Plaintiff [Kalshi] is likely to succeed on the merits of its claims and its rights will likely be violated by Defendants [the Council] through the enforcement of preempted state laws.”
Kalshi’s argument against the Tennessee Sports Wagering Council
The lawsuit challenged the decision to block prediction markets in Tennessee, arguing that Kalshi’s operations should only be governed by the Commodity Futures Trading Commission (CFTC). This suit was filed on the same day as the cease-and-desist letters was sent, including an assertion from Kalshi that it believed the Council would imminently bring an enforcement action against the company, despite allegedly telling Kalshi that no such action was planned.
Kalshi sued the Tennessee Sports Wagering Council on Friday, although the case did not get docketed until today. The case has been assigned to Judge Aleta A. Trauger in the Middle District of Tennessee. pic.twitter.com/H7SxgHJHNj
— Andrew Kim (@akhoya87) January 12, 2026
“Kalshi has endeavored in good faith to reach an accommodation with Tennessee,” the company states in the lawsuit, as seen in legal documents shared by litigator Andrew Kim. “Over the past several months, Kalshi’s counsel has attempted to discuss the matter with the Tennessee AG, to no avail.”
The prediction market also included emails from a representative for the company with Lacey Mase, the Chief Deputy Attorney General in Tennessee, as proof that attempts were made to start a conversation. However, Mase responded saying that she “didn’t have anything to share with Kalshi at the moment”, but that if circumstances changed, she would arrange a call.
Kalshi alleges that it made several attempts to have a conversation with Tennessee officials about its event contracts, but that those officials largely refused to engage — that is, until the Sports Wagering Council sent a cease-and-desist. pic.twitter.com/mC5vtTlovC
— Andrew Kim (@akhoya87) January 12, 2026
That email was dated January 6, with the cease-and-desist letters sent just three days letter on January 9.
Kalshi is not new to facing lawsuits attempting to block its operations in other states in the US, having filed counter-suits in Nevada, New York, and Connecticut, as just a few examples. In all of those cases, the prediction market has argued that regulation of it and other prediction markets should be carried out by the CFTC.
Featured image: Kalshi
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