- The Tennessee Sports Wagering Council sent a letter opposing sports event contracts to the Commodity Futures Trading Commission
- The council urges the commission to respect the policy decisions made in the state and not permit sports event contracts
- A roundtable on the issue will be held April 30
Tennessee sports betting regulators have officially declared their opposition to sports event contracts.
The Tennessee Sports Wagering Council (TSWC) sent a letter to the Commodity Futures Trading Commission (CFCT) opposing sports event contracts offered by CFTC regulated entities, such as Kalshi, Robinhood, and Crypto.com.
“We believe that these sports event contracts are Wagers under the Act and are being offered in violation of Tennessee law and regulations,” Mary Beth Thomas, executive director of the TSWC, wrote.
Sports Event Contracts Akin to Sports Betting?
Tennessee is the latest state to formally oppose sports event contracts within its borders, but did not take any official action against the entities offering the contracts.
Maryland, New Jersey, Nevada, Illinois, Ohio, and Montana gaming regulators have all sent cease-and-desist notices to prohibit the offering of sports event contracts within their borders. In response to the notices, KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB).
The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
According to the TSWC, licensed online sports betting operators are the only entities in the state allowed to offer sports bets.
“The sports event contracts give consumers the option to purchase contracts corresponding to one of two outcomes of an event. In a sporting event context, a consumer is purchasing a contract that reflects which team they believe will win or lose the matchup. The ultimate result is money being won or lost based on the outcome of a game,” Thomas wrote.
Thomas continued and asked the CFTC to “respect the policy decisions made by the Tennessee Legislature and not permit the offering of sports events contracts.”
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CFTC Holding April Roundtable
The TSWC offered the letter opposing the sports event contracts ahead of the CFTC’s scheduled public roundtable on sports-related event contracts.
The roundtable will be held on April 30, with the ultimate goal of developing an official opinion on the commission’s approach to regulation and oversight of prediction markets, including sports event contracts.
It will be an important opinion, as Kalshi Co-Founder and CEO Tarek Mansour noted in a recent interview the company will only cease offering the sports event contracts if ordered by the CFTC. Mansour, and Kalshi lawyers, have long maintained the states have no regulatory power over prediction markets.
Tennessee regulators have recently made the decision to decline sports event contracts, sparking controversy and debate among sports fans and stakeholders. The decision comes as a surprise to many, as Tennessee has been known for its thriving sports industry and enthusiastic fan base.
The Tennessee Regulatory Authority, which oversees contracts for sports events in the state, cited various reasons for their decision. One of the main concerns was the financial implications of hosting large-scale sporting events. With the ongoing COVID-19 pandemic causing uncertainty and financial strain for many organizations, the regulators felt it was not feasible to commit to hosting sports events at this time.
Additionally, there were concerns about the safety and logistics of hosting events with large crowds. The regulators expressed worries about the potential for COVID-19 outbreaks and the challenges of enforcing social distancing measures at sporting events. They also mentioned the strain on local resources and infrastructure that comes with hosting large events.
Many sports fans and organizations have expressed disappointment and frustration with the decision. Sporting events are not only a source of entertainment and excitement for fans, but also a significant economic driver for the state. The revenue generated from ticket sales, concessions, and merchandise sales can have a positive impact on local businesses and communities.
Despite the regulators’ decision, there is hope that sports events will eventually return to Tennessee. As the COVID-19 situation improves and restrictions are lifted, there may be opportunities for sports organizations to renegotiate contracts and bring back beloved sporting events to the state.
In the meantime, sports fans are encouraged to support their favorite teams and athletes in other ways, such as watching games on TV or streaming platforms, purchasing merchandise online, and engaging with sports content on social media. While the absence of live sporting events may be disappointing, it is important to prioritize safety and health during these uncertain times.
Overall, the decision by Tennessee regulators to decline sports event contracts is a reminder of the challenges facing the sports industry in the wake of the COVID-19 pandemic. It is a difficult but necessary decision to ensure the safety and well-being of fans, athletes, and communities. As we navigate these unprecedented times, it is important to stay informed, stay connected, and support each other as we look forward to a future where sports events can once again thrive in Tennessee.