Federal Judge Blocks Tennessee's Attempt to Ban Kalshi Political Sports Contracts

A federal judge has issued a temporary restraining order against the state of Tennessee, preventing it from shutting down Kalshi's political event contracts. The state's financial regulator had previously ordered the prediction market platform Kalshi to cease offering contracts related to political outcomes, such as which party will control Congress. Tennessee officials argued these contracts constitute illegal gambling. However, the judge's ruling allows Kalshi to continue its operations in the state for now, marking a significant legal development for the prediction market industry and its clash with state-level regulatory frameworks. The case highlights the ongoing debate over whether such financial instruments are gambling or legitimate trading tools.