Kalshi Dealt Setback in Court, Blocked from Offering Prediction Markets in MA for Now

Kalshi has been dealt a setback in Massachusetts, with Suffolk County Superior Court Judge Christopher Barry-Smith siding with Attorney General Andrea Campbell, who requested an injunction against the prediction market platform in September.

Kalshi Set to Appeal Injunction Against Its Business in Massachusetts 

The injunction will go into effect on Friday, January 23, and it will at least temporarily prevent Kalshi from offering its sports event contracts, which the AG’s office claims to be a form of gambling.

Kalshi has maintained that its products are financial services regulated under the Commodity Futures Trading Commission’s remit. 

Judge Barry-Smith’s interpretation, however, points to the opposite – i.e., that Kalshi needs to be a licensed entity under the Sports Wagering Law to continue offering its sports event contracts locally. 

Kalshi will, however, appeal the injunction as it is unlikely to give up on a market. The platform, and fellow prediction markets, argue that they offer a distinct product whereby they do not set any of the odds – this is left to the public. 

Prediction markets, Kalshi has explained on multiple occasions, offer a superior financial product that is not unlikely making prediction about economic developments. However, gaming regulators have grumbled – particularly in Nevada, where the Gaming Control Board has targeted both Polymarket and Kalshi over this interpretation. 

A Mesh of Business Interests and Ongoing Legal Battles

But things aren’t that simple. The American Gaming Association and the Indian Gaming Association both have criticized prediction markets as not only a threat to traditional gaming but also a roundabout way to skirt laws.

However, even established sports betting companies have hesitated, and the two biggest – FanDuel and DraftKings – have quit the AGA over its continued antagonization of the prediction market segment.

Not surprisingly, FanDuel and DraftKings have both launched their own prediction market platforms. Prediction markets do enjoy a fairly good overall position, but they are also plagued by accusations of a lack of substantial player protection measures, as well as fears of rampant insider trading.