Tennessee Attorney General Jonathan Skrmetti says prediction markets, like Kalshi, should follow the same rules as the state's licensed sportsbooks. A federal court agreed. Here's what happens next.

Tennessee has won a major round in its legal fight with prediction market company Kalshi, strengthening the state’s ability to regulate sports-related contracts offered on the platform.

Prediction markets allow users to put money on whether a future event will occur. The available markets can involve entertainment, politics, weather and numerous other subjects. However, Tennessee’s court fight with Kalshi focused specifically on contracts involving sporting events.

“The states have the authority to regulate gambling,” Tennessee Attorney General Jonathan Skrmetti told NewsChannel 5.