Kalshi Wins Tennessee TRO While Polymarket, Crypto.com Face January 31 Deadline Alone

A federal judge has handed Kalshi a critical early victory in its battle against Tennessee regulators, issuing a temporary restraining order that blocks the state from enforcing its cease-and-desist order while litigation proceeds. But Polymarket and Crypto.com—who received identical enforcement letters on January 9—have filed no lawsuits and remain fully exposed to the January 31 deadline that threatens criminal prosecution.

What the TRO Does

Judge Trauger’s order bars the Tennessee Sports Wagering Council and Attorney General Jonathan Skrmetti from enforcing state gambling and sports betting statutes against Kalshi while the case proceeds. The January 31 deadline—which demanded Kalshi void all sports contracts, refund Tennessee customers, and cease operations—is effectively suspended for the platform.

Critically, the TRO applies only to Kalshi. Polymarket and Crypto.com, who received identical cease-and-desist letters, are not parties to this lawsuit and receive no protection from the ruling. The January 31 deadline remains fully in force for both platforms.

Why “Likely to Succeed” Matters

This wasn’t just procedural relief. When Judge Trauger found that Kalshi is “likely to succeed on the merits of its claims,” she signaled substantive agreement with Kalshi’s federal preemption argument—the position that CFTC-regulated designated contract markets cannot be regulated as gambling operations by states.

This language echoes rulings in New Jersey and Connecticut, where federal judges also found Kalshi likely to prevail on preemption grounds. In contrast, Maryland’s denial of injunctive relief came without such a finding—a distinction that may prove significant as these cases wind toward potential Supreme Court review.

The State Enforcement Scorecard

Tennessee is now the fifth state where Kalshi has sought emergency relief from gambling regulators. The pattern is emerging: federal courts are increasingly sympathetic to the preemption argument, while state regulators continue pushing back.

Running tally: Kalshi is 3-2 on preliminary rulings. The wins (NJ, CT, TN) all feature judges finding federal preemption likely applies. The losses (NV, MD) came from courts less persuaded by the argument—or in Nevada’s case, from a dissolved injunction after the state demonstrated a path to enforcement.

Polymarket and Crypto.com’s Conspicuous Silence

While Kalshi filed suit within 24 hours of receiving Tennessee’s cease-and-desist, Polymarket and Crypto.com have made no public legal moves. Both platforms received the same January 9 enforcement letters. Both face the same January 31 deadline. Neither has sued.

For Polymarket, the calculus is complicated. Unlike Kalshi, Polymarket is not a CFTC-regulated designated contract market. The platform operates under a 2022 settlement with the CFTC that ostensibly bars U.S. persons from its main platform. Tennessee’s cease-and-desist suggests residents are accessing the platform anyway—potentially via VPNs—which raises separate legal exposure around geoblocking compliance.

The NFL Timing Advantage

The TRO’s timing is strategically significant. Sports prediction markets see their highest volumes during NFL playoff season, and Kalshi can now operate in Tennessee through the Divisional Playoffs (this weekend) and potentially through the Conference Championships on January 26—the same day as the preliminary injunction hearing.

If Judge Trauger converts the TRO into a preliminary injunction, Kalshi would be positioned to operate through the Super Bowl on February 9. For Polymarket and Crypto.com, the opposite is true: they face an enforcement cliff during the most lucrative period of the sports betting calendar.

What Happens on January 26

The preliminary injunction hearing before Judge Trauger will determine whether the TRO becomes a longer-lasting order protecting Kalshi while the full case proceeds. Tennessee will argue that the state has a legitimate interest in regulating gambling within its borders. Kalshi will reiterate that CFTC regulation preempts state gambling law.

If granted, Kalshi continues operating in Tennessee pending a full trial on the merits. If denied, the TRO dissolves and Tennessee can resume enforcement. Either way, the outcome doesn’t directly affect Polymarket or Crypto.com—they remain subject to the January 31 deadline unless they file their own lawsuits.