Key Points in the Massachusetts Case Against Kalshi

  • Massachusetts’ Attorney General argues Kalshi is an unlicensed gambling operation.
  • Kalshi argues the Commodity Futures Trading Commission (CFTC) has jurisdiction over its event contracts.
  • Massachusetts’ Attorney General is in state court working to have Kalshi blocked from doing business in the state.

Massachusetts Attorney General Targets Kalshi

If Massachusetts’ Attorney General Andrea Joy Campbell has her way, sports prediction-market operator Kalshi will be blocked from hanging a shingle and doing business in the Bay State.

Campbell is asking a state court judge to block Kalshi from opening its platform to Massachusetts residents, arguing the company is running an unlicensed gambling operation.

This is the first time a US state is seeking to prevent wagering on a prediction platform via court order. Kalshi is dealing with lawsuits in multiple states from regulators arguing that the prediction market company is breaking state laws by offering event contracts that are just like sports bets.

Unlicensed Gambling Operation Allegations

Prediction market companies like Kalshi and Polymarket argue they don’t fall under state law jurisdiction because they are regulated on the federal level by the Commodity Futures Trading Commission (CFTC). Platforms like Kalshi offer prediction contracts where people make wagers on the outcomes of specific events.

Sporting contests and entertainment events dominate the wagering on these site, including an event contract up today asking people to predict the college football championship winner. There’s another one asking who the next US Presidential election winner will be, and one asking if President Trump will release any of the Epstein files.

In October, the NHL became the first major pro sports league to announce a partnership deal with Kalshi and Polymarket.

The enforcement action by the Massachusetts Attorney General is taking state legal challenges a step further. Specifically, Campbell is asking the court for an injunction that would shut down Kalshi’s operations in Massachusetts.

Kalshi’s Position and Regulatory Dispute

Kalshi and similar platforms maintain that their event contracts fall under federal commodities regulation rather than state gambling laws, pointing to oversight by the CFTC.

Campbell argues that what Kalshi offers is sports betting disguised as event contracts. Sports betting is fully licensed and legal in Massachusetts.

Those sports betting and online casino operators licensed in the state can’t offer their product to people under 21. Campbell argues that Kalsi offers its wagering product to people under that age.