Underdog Sues Tennessee Over Gaming Laws Targeting Prediction Market Business

Sports betting and prediction market company Underdog has filed a complaint against the state of Tennessee, arguing that the state has overreached in how it treats prediction markets, subjecting them to state gaming laws, instead of recognizing federal preeminence in the matter. Underdog Won’t Back Down from Prediction Markets The complaint was filed with the US District Court for the Middle District of Tennessee in Nashville, The Tennessee Journal reported. The complaint goes after the state’s attorney general, Jonathan Skrmetti, and members of the regulator, the Tennessee Sports Wagering Council. The lawsuit also follows a previous ruling by the Sixth Circuit late in September, which said that gaming regulators in Tennessee and Ohio may leverage state gaming laws in order to enforce rules against prediction market platforms. Underdog argued in its complaint, though, that the law leveraged by the state was an imminent threat to its business: “The threat of Defendants’ attempted enforcement of Tennessee law poses a direct and imminent threat to Underdog’s business and its users, and leaves Underdog with a ‘Hobson’s choice’ wherein both its options will cause irreparable harm.” No Clear and Distinct Regulation to Help Settle Matters Matters are hardly settled when it comes to the regulation of event contracts, even though the CFTC has carried forward with an interim rule and a proposed classification of sports event contracts recently. Regardless, state gaming regulators are taking a dim view of CFTC-issued guidance, and most insist that the Supreme Court of the United States intervene. The country’s highest court has, however, so far deferred to do this, and is not actively looking into prediction market cases. The lack of clear guidance and definitive ruling has created a legal maelstrom in which attorneys general, gaming regulators, and private businesses are continuously litigating in a bid to win turf battles that hardly settle the conflict, but at best – buy reprieve for the winning party, which tends to vary.