Underdog sues Tennessee, its 7th state fight over prediction bets

A federal appeals court rejected similar arguments from Kalshi against Tennessee just weeks earlier.

The hit

Underdog sued Tennessee’s sports betting regulator on Tuesday to block enforcement against its prediction market exchange, according to Legal Sports Report. The Tennessee Sports Wagering Council sent Underdog a cease-&-desist order, threatening potential civil penalties, a criminal probe & revocation of its fantasy sports licence.

Why it matters

Underdog claims its exchange falls under exclusive federal jurisdiction via the Commodity Futures Trading Commission, arguing Tennessee’s gambling laws can’t apply. Weeks earlier, the Sixth Circuit rejected similar arguments from Kalshi, ruling sports event contracts likely aren’t swaps & that federal law wouldn’t block Tennessee’s enforcement anyway, a decision that sets binding precedent for federal courts in the state.

The record

Cease-&-desist issued	9 October 2026 (Tennessee Sports Wagering Council)
States Underdog has now sued	7 (Tennessee, Connecticut, Massachusetts, New Mexico, Ohio, Washington, Wisconsin)
Urging Supreme Court review	39 state attorneys general & the NFL

What happens next

Watch for a Supreme Court decision on whether to take the Third Circuit’s New Jersey ruling, which could settle the split between circuits nationwide.

Sources: Underdog Sues To Stop Tennessee Prediction Market Crackdown

Named in this story? Reply to newsdesk@infobets.com & we publish it.

18+. Betting involves risk. If gambling is a problem for you or someone close to you, help is available.